I have a withdrawn commercial loan application. It is in an individuals name with ETBF following it. So, it reads "Jim Someone/ETBF". My first thought it to report it as an entity because it would have closed that way had they not withdrawn. However, after reflecting on it I am thinking it should be reported as an individual with the GMI reported as customer did not to furnish /our best guess.

Any thoughts on this?

Hi HMDA Girl. Could you please clarify. What is "ETBF"?

I would base my decision on how the application was made. Did they apply as an individual or as an entity?

Also, when I identify a HMDA reportable app after the action, I request that the LO contact the applicant and collect GMI. (whether they actually do is a whole other story)

A Google search on the acronym provided the following possibilities, but I'm sure none of these are what is be referenced.

Acronym

Definition

ETBF European Tenpin Bowling Federation
ETBF Eastern Tuna and Billfish Fishery (Australia)
ETBF Enterotoxigenic Bacteroides Fragilis
ETBF Ed Tech Business Forum (Software & Information Industry Association)


As Killin me Smalls asked, we need to know what ETBF means in your world.

It stands for "entity to be formed". It is commonly used when the use of the loan funds will concurrently trigger a new business entity. Real estate investors sometimes use this for the ownership of each new building.

It is commonly used when the use of the loan funds will concurrently trigger a new business entity.

I've been in this business in one capacity or another since 1974 and today is the first time I've seen this acronym used.

Since the intent of the applicant was to apply for the loan in the business entity to be formed I would advise treating it as a business entity loan request.

I consider these loans to a business entity and don't collect GMI, using the logic that it would be a loan to a business if it originated. Otherwise the lender would have to know when taking the application whether the loan will originate (business entity) or be denied or withdrawn (individual)?

I've never heard of ETBN either and I've been an examiner, loan officer and consultant for 26 years. I didn't ask for clarification as I thought I might be the only one.

Now to your question: I see the dilemma. There isn't a business entity yet, so I'm not sure I can agree with the response by NMB. If denied, there is no entity. If approved, the loan is still to an individual who will later form an entity. The loan officer can't guess, so I'd consistently collecting GMI.

At our bank, if the loan closes, it is in the name of the new business entity.

David - in your scenario, if the loan closed in the individual's name, I would agree with you.

Entity to be formed. I have seen that here at our shop.

Thank you for your comments and sorry for the confusion; ETBF is a term that our commercial loan officers use which means Entity To Be Formed. In this case, the borrower would have created an entity had they not withdrawn the loan so; the commercial loan officer did not collect the GMI at the time of application. Now I have a withdrawn commercial loan with an Individual’s name and an “ETBF”.

If the loan would have been consummated it would have been an entity. The loan was not denied as it never moved forward to underwriting. The applicant withdrew the loan.

I will be reporting the loan as though it was an entity. I believe that I will be able to defend the intent that the loan would have closed as an entity had it been consummated.

Again, thank you for your comments and input.

I think you can defend that, with the added comment that if along the way toward closing if a decision was made that the borrower would be an individual rather than an entity the bank would collect GMI at that time.

I agree Kathleen, that is what is being noted in the file.
Thanks for your input.