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#1336622 - 02/03/10 04:39 PM Loan Amount Reported
JustGottaKnow Offline
Member
Joined: Aug 2008
Posts: 77
I am confused. I have demand lines of credit, which are not normally reported since there is no maturity date to extend, which are being increased in 2009. Do I report just the amount of the increase or do I report the full amount of the line? This would also apply to deals with hard maturity dates that are not being extended, right?

Example: Originated demand line of credit done in 2001 for $200K; during its 2009 annual review, the credit limit is inreased by $100K to $300K. Would I report the increase as a new origination and report $100K or would I report the full amount of the line which is now $300K?

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CRA
#1336661 - 02/03/10 05:02 PM Re: Loan Amount Reported JustGottaKnow
Kelsey D Offline
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Joined: Aug 2006
Posts: 516
Ohio
In your example, you should report the full amount of the line, $300K. However, if the renewal takes place in the same year as the origination, or if it renews more than once per year, you would only report the extended amount.

Example: Originated demand line of credit done in 2009 for $200K; later that year, the credit limit is inreased by $100K to $300K.

Option 1: Report the loan twice on the LAR - once for $200K and once for $100K.

Option 2: Report the loan once on the LAR for $300.

I always choose option 1.

This is all discussed on page 12 of A Guide to CRA Data Collection and Reporting.
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#1336673 - 02/03/10 05:08 PM Re: Loan Amount Reported Kelsey D
JustGottaKnow Offline
Member
Joined: Aug 2008
Posts: 77
Just so I understand.

A loan/line originated in a previous year that is increased only (is not considered a renewal since the maturity date is not extended). I should report the full amount of the line, not just the increased amount. Correct?

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#1336697 - 02/03/10 05:18 PM Re: Loan Amount Reported JustGottaKnow
Mrs. Rizzo Offline
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Posts: 10,392
Curled up by the fire...
If it's the first time to report in a calendar year, you report the full amount. If it gets increased in the same calendar year, you report the increase.
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#1336726 - 02/03/10 05:36 PM Re: Loan Amount Reported Mrs. Rizzo
JustGottaKnow Offline
Member
Joined: Aug 2008
Posts: 77
Can you give me the section of the reg or q&a's that give that guidance?

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#1336753 - 02/03/10 05:55 PM Re: Loan Amount Reported JustGottaKnow
Mrs. Rizzo Offline
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Mrs. Rizzo
Joined: Mar 2006
Posts: 10,392
Curled up by the fire...
http://www.ffiec.gov/cra/pdf/cra_guide.pdf

See page 12

Data collected in 2001 and subsequent years. An institution
should collect information about small-business and small-farm loans that it refinances or renews as loan originations. (A refinancing generally occurs when the existing loan obligation or note is satisfied and a new note is written, while a renewal
is an extension of the term of a loan.
However, for purposes of small business and small-farm CRA data
collection and reporting, it is no longer necessary to distinguish between the two.) When reporting small-business and small-farm data, however, an institution may report only one origination (including a renewal or refinancing treated as an origination) per loan per year, unless an increase in the loan amount is granted.
If an institution increases the amount of a small-business or
small-farm loan when it extends the term of the loan, it should always report the amount of the increase as a small-business or small-farm loan origination. The institution should
report only the amount of the increase if the original or remaining amount of the loan has already been reported one time that year.
For example, a financial institution makes a term loan for $25,000; principal payments have resulted in a present outstanding balance of $15,000. In the next year, the customer requests an additional $5,000, which is approved, and a new note is written for $20,000. In this example, the institution should report both the $5,000 increase and the renewal or refinancing of the $15,000 as originations for that year.
However, the institution may report the $5,000 increase together with the renewal or refinancing of the $15,000 as one origination for that year.

Lines of Credit
Data collected in 2001 and subsequent
years. Renewals of lines of credit for small-business, small-farm, or consumer purposes should be collected and reported, if applicable, in the same manner as renewals of small-business or smallfarm loans (see Q&A __.42(a)5).
Institutions that are HMDA reporters continue to collect and report home equity lines of credit at their option, in accordance with the requirements of 12 CFR part 203.
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