Yes, banks can earn CRA credit for making PPP loans.

The FDIC has published guidance stating that “in most cases” PPP loans will receive CRA credit. The federal banking agencies also released a Joint Statement on CRA Consideration for Activities in Response to COVID-19 confirming that “the agencies will favorably consider . . . retail lending activities in a financial institution’s assessment areas that are responsive to the needs of . . . small businesses and small farms affected by COVID-19 and that are consistent with safe and sound banking practices.”

For CRA examination purposes, loans to for-profit businesses in amounts of $1 million or less are considered small business loans, and “PPP loans to small businesses could receive CRA credit as innovative or flexible lending practices.” Additionally, loans to small businesses in amounts greater than $1 million “that create or retain jobs would qualify as community development loans under economic development if the loans create or retain jobs or under revitalization/stabilization if they benefit primarily low- and moderate-income areas or distressed middle-income areas.” The Joint Statement also clarifies that “financial institutions will receive CRA consideration for community development activities,” which include “economic development activities that sustain small business operations, particularly in low- and moderate-income communities.”

For resources related to our guidance, please see:

• FDIC FAQs on the SBA’s Paycheck Protection Program (April 25, 2020) (“Will loans originated under the PPP receive CRA Credit? In most cases, yes. According to existing examination guidance as well as the March 19, 2020 Joint Statement on CRA Consideration for Activities in Response to the COVID-19, when consistent with safe and sound banking practices and applicable law, loans that benefit small businesses and small farms impacted by COVID-19 serve the long-term interest of those communities and the financial system. Generally, loans to for-profit businesses in amounts of $1 million or less are considered small business loans in CRA evaluations and will be considered as such under the lending test. Additionally, PPP loans to small businesses could receive consideration as innovative or flexible lending practices. Generally, loans to businesses greater than $1 million to small businesses that create or retain jobs would qualify as community development loans under economic development if the loans create or retain jobs or under revitalization/stabilization if they benefit primarily low- and moderate-income areas or distressed middle-income areas.”)

• Joint Statement on CRA Consideration for Activities in Response to COVID-19 (March 19, 2020) (“Pursuant to the Community Reinvestment Act (CRA), the agencies will favorably consider retail banking services and retail lending activities in a financial institution’s assessment areas that are responsive to the needs of low- and moderate-income individuals, small businesses, and small farms affected by COVID-19 and that are consistent with safe and sound banking practices.”)

• Joint Statement on CRA Consideration for Activities in Response to COVID-19 (March 19, 2020) (“In light of the declaration of a national emergency, this statement clarifies that financial institutions will receive CRA consideration for community development activities. Qualifying activities include those that help to revitalize or stabilize low- or moderate-income geographies as well as distressed or underserved non metropolitan middle-income geographies, and that support community services targeted to low- or moderate-income individuals. Such activities may include, but are not limited to: . . . Economic development activities that sustain small business operations, particularly in low- and moderate-income communities . . .”)