Banks and savings institutions reporting small-business lending data under the Community Reinvestment Act (CRA) said they originated and purchased an aggregate $264.9 billion in such loans during 2019, according to data made available Monday by federal banking regulators.
In the aggregate, about 7.6 million small-business loans (originations and purchases) were reported in 2019.
The data was released in a report issued by the Federal Deposit Insurance Corp. (FDIC), Federal Reserve, and Office of the Comptroller of the Currency (OCC) under the umbrella of the Federal Financial Institutions Examination Council (FFIEC). The data only covers small-business, small-farm, and community development loans of those institutions that are either required to report the data under the CRA – those having total assets of approximately $1.28 billion or more – and smaller institutions that voluntarily report it or choose to be treated as “large” institutions in their CRA evaluations.
Total CRA reporters, which included 126 institutions below the asset threshold, account for about 74.4% of small-business loans outstanding (by dollars) and about 31.3% of small farm loans outstanding (by dollars) at bank and thrift institutions, according to the report. Banks and savings institutions that were required to report the 2019 CRA loan data based on their asset size accounted for 98%, by dollars, of reported small-business loan originations. It said the very largest institutions – 118 reporters with assets of $10 billion or more – accounted for about 73% of CRA reported small-business loans originated in 2019, by dollars.
The agencies noted a 7.9% increase in the total number of small-business loans last year by reporting institutions, up from the 7.7% increase reported for 2018. The large year-over-year increase in reported small-business loan originations is mostly attributable to a small handful of banks, the report said. Overall, the report said, the dollar amount of small-business loan originations increased by about 3.6%. Regarding small farm loans, it said the number of originations increased by about 2.4% and the dollar amount increased by 0.4% in 2019 from 2018.
For small business loans, the maximum loan size reported is $1 million; for small farm loans, the maximum is $500,000. Measured by number of loan originations, about 94% of the small-business loans and 80% of the small-farm loans originated in 2019 were for amounts under $100,000, the report showed. The agencies said the distribution differs for the dollar amount of loans originated; about 39% of the small-business loan dollars and about 29% of the small-farm loan dollars were extended through loans of less than $100,000.
Overall, all lenders reported over $111 billion in community development loans in 2019, up 8% from the amount reported in 2018, the report showed.
The report notes that the business and small-farm lending data reported under CRA regulations provide useful information, but the data is less comprehensive than the data reported on home mortgage lending under the Home Mortgage Disclosure Act. For example, the CRA data:
- include information on loans originated or purchased, but not on applications denied;
- indicate whether a loan is extended to a borrower with annual revenues of $1 million or less, but the data do not include demographic information about the applicant; and
- are aggregated into three categories based on loan size and reported at the census tract level, rather than loan-by-loan.