Under the Community Development definition, Economic Development means financing businesses or farms that meet SBA size standards or $1 million or less annual revenue. It can also mean job creation or job retention. For clarification, do the jobs created/retained have to be LMI wage? Is there documentation to support the correct answer that I can reference?
Check out page 22 of the interagency CRA Questions and Answers https://www.gpo.gov/fdsys/pkg/FR-2016-07-25/pdf/2016-16693.pdf Q & A .12(g)(3) – 1 states, in part. “. The concept of “community development” under 12 CFR __.12(g)(3) involves both a “size” test and a “purpose” test that clarify what economic development activities are considered under CRA. To meet the “purpose test,” the institution’s loan, investment, or service must promote economic development. These activities are considered to promote economic development if they support:
• Permanent job creation, retention, and/or improvement
1. for low- or moderate-income persons;
2. in low- or moderate-income geographies;
3. in areas targeted for redevelopment by Federal, state, local, or tribal governments;
4. by financing intermediaries that lend to, invest in, or provide technical assistance to start-ups or recently formed small businesses or small farms; or
5. through technical assistance or supportive services for small businesses or farms, such as shared space, technology, or administrative assistance; or
Several of these items, including 2 and 3, are not limited to jobs for low- and moderate-income persons.