Definition of a "Small" Business under CRA Rules

C

Under the Community Reinvestment Act (CRA), there is no one-size-fits-all definition of a "small" business. Instead, different regulatory agencies have established their own standards for what constitutes a small business in their respective industries.

For example, the Small Business Administration (SBA) defines a small business as having fewer than 500 employees for most industries, while in the manufacturing industry, a small business may have up to 1,500 employees. In addition to the number of employees, the SBA also considers factors such as annual revenue and industry size when determining whether a business qualifies as "small."

However, in the context of the given answers, the CRA definition of a "small" business would likely refer to option C: a business that produces gross annual revenues of $1 million or less. This is because the CRA generally focuses on ensuring that financial institutions are meeting the credit needs of low- and moderate-income communities, which are more likely to be served by smaller businesses.

It's worth noting that while the other options (employing fewer than 50 people and having assets of less than $5 million) may also be relevant in determining whether a business qualifies as "small" under certain circumstances, they are not the primary criteria used by regulators to assess small business lending practices under the CRA.