Independent Banker - July 2021 - 32

PORTFOLIO
members or for the benefit of an
economically disadvantaged class of
persons
 an SPCP offered by a for-profit
organization, or in which such an
organization participates, to meet
special social needs when established
and administered under a written
plan. Such a plan identifies the
class of persons that the program
is designed to benefit and sets forth
the procedures and standards for
extending credit pursuant to the
program. It is designed to extend
credit to a class of persons who,
under the organization's customary
standards of creditworthiness,
probably would not receive such credit
or would receive it on less favorable
terms than are ordinarily available.
Community banks are solidly
versed in providing mainstream
The Federal Reserve Bank of Atlanta has reported
that the lack of access to financial services ...
impedes economic mobility [and that] ... limited
access to credit can cripple the formation of small
businesses and community development.
credit tools and products. But what
if a community bank is interested in
developing an SPCP? What are the
requirements of an SPCP?
How to develop an SPCP
The parameters of any program
must be specific to the capabilities,
resources and limitations of the
community bank and appropriate for
the communities and groups it serves.
Serving the financially
Loan Participations
Structured for the
Community Bank Market
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underserved is not a new idea. In
December 2019, the five federal
financial institution regulatory
agencies-the CFPB, Federal
Reserve Board, Federal Deposit
Insurance Corporation, Office of
the Comptroller of the Currency
and National Credit Union
Administration-issued a joint
interagency statement on the use
of alternative data, information
not typically found in consumer
credit reports or provided by
consumers on applications for credit
in underwriting.
In the statement, the agencies
highlighted the benefits to
consumers, such as expanding access
to credit and enabling consumers to
obtain additional products and more
favorable pricing and terms.
The CFPB has observed SPCPs
at for-profit institutions, including
a small business lending program
for minority-owned businesses
and a mortgage lending program
with special rates and terms for
individuals with income below
certain thresholds or who are buying
property in areas where the median
income was below certain thresholds.
The programs were established and
administered under written plans and
Independent Banker - July 2021

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