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Question & Answer
Question: We just received notice of our pending CRA exam. The letter asks for 1998 data for use during the examination. Why, when we just finished our 1997 HMDA and CRA data submissions, are we asked for still more data?
Answer: Here's the problem. By the time examiners get reported data for use, it is stale and doesn't tell your current story. The data you have reported shows last year's picture. A lot may have happened to your lending since then. Examiners try to look at what the bank is doing now and to do that, they need current information.
The examiners may also ask for data that the bank did not report, such as unsecured consumer loans. They usually do this to get a complete picture of the bank. Although the regulation officially leaves this reporting decision up to the bank, many examiners (and consultants) find that it is to the bank's advantage to look at unreported loans such as the consumer installment portfolio because that is where the real low- and moderate-income lending happens.
When an examiner makes a request like this, you should talk to them to find out what is behind the request. If it is part of an effort to help your bank show the best performance, it would be to your advantage to work with them. However, the examiner could also be operating out of bounds. In that case, work with the examiner - as politely as possible - to reduce or eliminate the request. Start with asking why the examiner needs the information.
Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3, No. 8, 6/98
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