Ok kids, I just completed my first HMDA training session (one of three). When we got to the refinance area, I had a Commercial lender ask my if we have a refinance situation for a commercial deal (dwelling -secured at both ends) since the bank has chosen not to report consumer HELOCs and therefore no refinances of a HELOC to a HELOC,
DO WE HAVE TO REPORT the refinance of business Lines of Credit???
Or another way to put this are business-purpose lines of credit that meet the refinance test OPTIONAL reporting? We do a ton of these, so it will make a big difference in the amount of data that will be reported.........
Thanks in advance for any responses.

I would say if you refinance a dwelling-secured business LOC with another dwelling-secured business LOC, reporting would be optional. If you refinance the same dwelling-secured business LOC with a dwelling-secured business term loan, it's reportable.

Watch out on this one. I don't think you are comparing apples to apples. Your business lines of credit cannot be compared to HELOCs. The definition of HELOCs refers to Reg. Z, therefore business purpose nature of the line will not make the business line of credit comparable to a HELOC.
Unfortunately, I do nopt know the answer to whether or not the business lines of credit are optional reporting. If they are, we will have to come up with some regulatory cite or "HMDA Getting It Right" section as the basis for the decision.

Supplement I, 226.5b: Requirements for Home Equity Plans (01/01/02)

1. Coverage. This section applies to all open-end credit plans secured by the consumer's dwelling , as defined in §226.2(a)(19), and is not limited to plans secured by the consumer's principal dwelling . (See the commentary to §226.3(a), which discusses whether transactions are consumer or business-purpose credit, for guidance on whether a home equity plan is subject to Regulation Z.)

If the business line of credit is secured by equity in the dwelling then IMO it's a home equity line of credit. It's a line of credit secured by equity in a home/dwelling.

As long as the LOC is an open-end LOC, I stand firmly by my belief that they are optional for reporting purposes.

The new HMDA Q and A makes it clear that "a dwelling-secured line that satisfies and replaces another dwelling secured obligation is not required (but may be?) reported as a "refinanceing", regardless of whether the line is for consumer or business purpose.

See New HMDA Q & A:

"Refinancing---Line of Credit. If a dwelling-secured line of credit satisfies and replaces another dwelling-secured obligation, is the line required to be reported as a "refinancing"?"

Answer: No. A dwelling-secured line of credit that satisfies and replaces another dwelling-secured obligation is not required to be reported as a "refinancing", regardless of whether the line is for consumer or business purposes.

Hope this helps.

OK, we've settled it that ALL lines of credit are optional for HMDA - not just HELOC's subject to TIL.

Now, back to the original question: A line of credit that refinances a line of credit, is still optional. I like to think of it this way: The HELOC optional exemption "trumps" the Refinancing requirement.

Anyone up for a game of Rock, Paper, Scissors HMDA-style?