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At the Rural Center: The Community Reinvestment Act

January 2005
By: Dinah Monahan
I had heard many times that banks were required by law to give some money back to their communities. A few months ago, I had lunch at a friend's home. Another couple was visiting from out of town. The husband, Larry Seedig, was genuinely interested in our ministry. He asked if our center got Community Reinvestment Act (CRA) funds from banks. Larry is not only a CEO of a large bank, he also serves on many charity boards. The ensuing conversation and his graciousness gave me all I needed to apply for CRA money. The following is a summary of this information.

The CRA was passed in 1976. Its purpose is to prevent financial institutions from taking deposits from low-income areas and investing the money in "high-income areas. Therefore, under this act all banks and savings and loan institutions are required by law to reinvest in their communities.

Banks were placed in two different categories: large banks (assets over $250 million) and small banks (assets under $250 million). Small banks are evaluated on one criterion: low-income loans made within their community. Large banks are evaluated on three criteria: loans and investments (e.g., school bonds and loans to groups that create low-income housing), service hours donated by employees to projects in low-income areas, and cash grants to projects that serve low-income areas.

To seek CRA-qualified funds, follow these steps:

1.Call the local branch of a bank and ask if they have a CRA or Community Reinvestment officer.
2.If they do, ask for details on how you can apply for a grant.
3.Ask for a list of required information.
4.If they don't, ask for their nearest corporate headquarters and repeat the process.
5.One thing that carries weight with your request is a recommendation from your local branch manager. Give the manager a tour of your organization and cultivate a relationship.

Rural centers in particular can benefit from CRA grants. Rural bank branches are small, and PCC directors have the opportunity to get to know the managers. Many rural communities are economically depressed. That meets one of the requirements for CRA grants. What's more, PCC clients tend to be at poverty level and below. That is another qualifier. Remember to use this terminology in your request.

So, next time you seek donations from a bank, be sure they know that your organization meets the qualifications for CRA grants. It may be a new source of income for your ministry.

Dinah Monahan is the Heartbeat International Consultant for Rural and Small Centers and the founder and Executive Director of Women's Choice Pregnancy Clinic and Hope House Maternity Home.

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