Common Questions
What should a bank, private trust or foundation do that wants to be involved?
Potential sponsors interested in participating in the Foundation's
activities, may contact the Foundation office and we will be happy to fully
brief them and answer any questions. The Foundation can be reached by phone
877-232-0859 or by mail at:
SHCPF, Inc.
5100 Poplar Ave., Ste. 711
Memphis, TN 38137
What exactly is the Senior Housing Crime Prevention Foundation?
The Senior Housing Crime Prevention Foundation, a 501c-3 non-profit corporation, was established with guidance from the Office of the Comptroller of the Currency (OCC), the primary federal regulator of the banking industry, for three purposes: (1) to insure the safety, security and protection of nursing home and HUD senior housing residents against all aspects of crime, (2) to provide an avenue for the banking community to receive qualified Community Reinvestment Act (CRA) credit through participation, and (3) to provide private trusts and foundations with a risk free way to fulfill their missions by supporting crime free living environments for residents of these facilities.
In what areas can banks get CRA credit?
At the direction of the regulatory parties, two foundations have been created, one to meet loan test requirements and one to meet investment test requirements. In addition, support to senior housing residents through the SHCPF also qualifies a bank to receive its service test requirements. Banks may also elect to simply make a donation to the Foundation, as these funds will also qualify under investment test requirements. View a flow chart of how funds are used.
Why nursing homes & HUD properties?
Nursing home & HUD residents meet the definition of a low-to-moderate income group and can qualify for government subsidies for Care and Housing. Therefore, any loan or investment that goes to benefit or support this group is considered as qualified CRA credit and allows banks to support a segment of society that it might not otherwise touch. Further, these industries are known to have problems in areas that the Senior Crimestoppers program directly addresses.
How does this benefit a bank?
Often it is difficult for banks to find reasonable, low-risk, community focused opportunities to meet their CRA loan or investment requirements. The Foundation provides a bank with an outlet to meet both loan and investment test requirements, as required by law. Further, the foundation is structured in such a way that the bank has zero to minimal risk of capital in either category. Many times CRA qualified types of loans and investments are considered risky at best. The Foundation guarantees (dependant upon the selection by sponsoring entity of the bonds used to collateralize the capital loaned/invested) the return of the full amount loaned or invested at the end of a five-year period because each is fully collateralized. Because of this, any loan or investment made with the Foundation requires no loan loss reserve provision by the investing or loaning bank. In addition, banks may receive dollar for dollar CRA credit in each calendar year the invested or loaned capital remains with the Foundation. There is also a guaranteed yield of the effective yield of the bond purchased less a portion retained by the Foundation payable twice a year to the sponsoring entity. Also, the funds provided by the bank are guaranteed to be used in the primary assessment area (s) where the bank must have credit. Besides all of this, a bank has no work, administrative burden or overhead associated with participation.
What does the nursing home or senior housing facility receive?
The facilities also win, perhaps more than anyone else. A facility sponsored by the SHCPF receives the Senior Crimestoppers program absolutely free of charge with no strings attached during the loan/investment period. Benefits such as reduced risk exposure, lower cost of liability insurance, reduction in crime incidents experienced, lower staff turnover and associated costs, enhanced staff morale, abatement of litigation events and hard dollar cost savings are all brought to the facility through implementation of the Senior Crimestoppers program.
What is the Senior Crimestoppers program?
The Senior Crimestoppers program is a group of coordinated components designed to reduce incidents of crime in senior housing settings. It is made up of several key components. One of these components is the provision of personal lock boxes - safe deposit boxes, if you will - for use by the residents and/or family members of a facility. Also included as a standard part of the program is a totally anonymous, around the clock tipsline call center. The tipsline is an information conduit for facility management. Through it, anyone can provide any type of information completely anonymously about any type of problem that exists. If the information provided helps a facility solve or prevent an incident, the tipster qualifies for a no questions asked cash reward of up to $1,000 - another major component of the program. More information about Senior Crimestoppers can be found at the program website - www.seniorcrimestoppers.org.
How long is the commitment period?
The commitment period for all funds is 60 months. At the conclusion of this time period, a participating sponsor that has selected the loan or investment method may ask for and receive the return of the full capital amount or may elect to continue participating in SHCPF activities.
Is Foundation support risk Free?
It can be. Many banks opt to direct the Foundation to purchase US Treasuries or Agencies - the safest form of security that exists to collateralize the loan or investment, thus making it risk free.
What yield does a sponsor receive?
First, they receive the effective annual yield of the bond purchased, less a portion retained by the Foundation. In addition, most banks use the relationship with the sponsored nursing home to offer special banking packages to the management, board, staff, residents and family members. Profitability from this activity can push the overall yield to 8 - 12% per year, depending on the new accounts and relations established.
How "far reaching" is the Foundation?
The SHCPF serves every state in the country. This allows all banks, private trusts, foundations to sponsor nursing homes.
What if a bank is regulated by an Agency other than the OCC?
The OCC issued a letter on March 20, 2000 which has been shared with all Federal regulatory agencies. These agencies have embraced the program giving full dollar-for-dollar credit in CRA examinations. Several examples from each agency are provided on our website under the New & Letters section entitled "Excerpts from CRA Exams".