Case Study: Structured Investment Product for CRA Regulatory Credit
Situation: Banks need to make investments that qualify for Community Reinvestment Act regulatory credit. Traditional investments in mortgage securities have proven riskier than expected and the return characteristics for other CRA investments are often disappointing.
Approach: Designed a structured investment product that is eligible for CRA credit comprised of assets that serve to raise yield expectations.
Result: The Fund supports affordable housing development, while also supporting investments and loans to small businesses.
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