Delaware does not appear again on a new listing of distressed or underserved non-metropolitan middle-income geographic areas where revitalization or stabilization activities are eligible to receive Community Reinvestment Act (CRA) consideration under the community development definition. The list, which reflects local economic conditions including unemployment, poverty, and population changes, was published June 24 by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp. (FDIC), and the Office of the Comptroller of the Currency. Distressed non-metropolitan middle-income geographies and underserved nonmetropolitan middle-income geographies are designated by the agencies in accordance with their CRA regulations. The criteria for designating these areas are available on the Federal Financial Institutions Examination Council (FFIEC) website. Areas will be designated as distressed if it is in a county that meets one or more of the following triggers:

• An unemployment rate of at least 1.5 times the national average
• a poverty rate of 20% or more
• a population loss of 10% or more between the previous and most recent decennial census or a net migration loss of 5% or more over the five-year period preceding the most recent census.

As with past releases, the agencies apply a one-year lag period for geographies that were listed in 2019 but are no longer designated as distressed or underserved in the current release. Revitalization or stabilization activities in these geographies are eligible to receive CRA consideration under the community development definition for 12 months after publication of the current list. “It is ‘good news’ for the community that counties in Delaware do not meet the requirements to be designated as a distressed or underserved nonmetropolitan middle-income geography,” WSFS Bank Community Reinvestment Director Ron Dutton said. “These communities typically have high unemployment, high poverty, and other problems which plague these communities and lead to the designation. It does not make it more difficult to get funding. Typically, the designated and distressed areas have a direct line of funding sources.” Dutton added that even though the designation areas may yield additional state, federal, and private funding sources for the communities, funding often falls short to remedy the distressed designation. “In Delaware, there are several low- and moderate-income census tracts statewide that afford opportunities for the banks to make direct investments, provide community services, and lending to support community reinvestment efforts to improve the quality of life of low- and moderate-income residents,” he said. According to Federal Financial Institution Examinations Council (FFIEC), Delaware has 218 census tracts:

• New Castle County has 131 census tracts; 38 are moderate-income census tracts and eight are low-income census tracts.
• Kent County has 33 census tracts; six are moderate-income census tracts and one is a low-income census tract.
• Sussex has 54 census tracts; five are moderate-income census tracts and it has no low-income census tracts.

“I think it’s good news for our community that we don’t meet the threshold for unemployment, poverty and population loss that would qualify our geographies as distressed or underserved. There are still many communities that need our help in Delaware and many opportunities for banks to serve low- and moderate-income populations through CRA,” Discover Bank Assistant CRA Director Amy Walls said. “Banks can use place-based designations like low- and moderate-income census tracts to do so. Another alternative is to qualify CRA activities on project-by-project basis based on the demographics of the people served.”

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By Peter Osborne posborne@delawarebusinesstimes.com