I know that the CRA Guide says, "Loans for which the institution did not collect revenue information may not be included in the loans to businesses and farms with gross annual revenues of $1 million or less when reporting this data."

We do not require or consider revenues for commercial loans $25,000 and under. However, sometimes, when the loan officer is completing the application, the customer will provide gross revenues and they will enter it. Our applications are electronic and are not in the file. It is not considered in the credit decision. So, do we put Unknown, even if we know it but it is not considered?

Also, we sometimes make a loan under $25,000 where the income is not considered to a borrower that has other larger loans on the books. So we may have a tax return in the file, but it is not considered in the credit decision for the small loan. Do we still use Unknown?

When I say that the revenue is not considered, I mean that the underwriter does not even see that amount.

If you have gross revenue/sales number, include it. It benefits the bank. You are demonstrating that you are servicing businesses that have sales of $1MM and less. So, when you know it, include it.

I agree, if you don't have it AND you did not consider it in the credit decision, you can code it as a 3, unknown.

However, if you have it in file (or maybe another credit file) I would recommend using it as you only get credit for an income code of 1, not for 3. I have done this often.

What would you do in the situation of stated revenues? Similarly, we do not collect/verify revenues/sales on Commercial Loans less than $25,000. If the lender ask the borrower, "What are your stated revenues?", can we use that figure to assign a revenue category? The revenues are not unknown (3), we just don't obtain documentation to support the revenues.

§ll.42(a)(4)—4 ... "The CRA regulations similarly do not require institutions to verify revenue amounts; thus, institutions may rely on the gross annual revenue amount provided by borrowers in the ordinary course of business."