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#2146574 - 09/19/17 01:17 AM HMDA CRA Double Reporting
terpsfan Offline
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Joined: Feb 2007
Posts: 2,058
Am I missing something or will the new hmda rules cause more small business loans where a dwelling is taken as abundance of caution be reported under hmda?

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#2146577 - 09/19/17 03:19 AM Re: HMDA CRA Double Reporting terpsfan
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Abundance of caution has never removed any loan from HMDA. The new rules exclude loans secured by a dwelling if the purpose is business operating. However, if you refinance those loans, they are reported. So, yes, those will increase reporting.
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David Dickinson
http://www.bankerscompliance.com

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#2146956 - 09/21/17 01:41 PM Re: HMDA CRA Double Reporting terpsfan
Aruba123 Offline
Member
Joined: Jan 2012
Posts: 70
New York
Just so I understand this completely... A dwelling secured business loan to purchase equipment is not HMDA reportable under the new rules, but if that same loan is refinanced down the line it will be?

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#2146969 - 09/21/17 02:39 PM Re: HMDA CRA Double Reporting Aruba123
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
Correct, just as it is now.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2146979 - 09/21/17 02:47 PM Re: HMDA CRA Double Reporting terpsfan
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
Terpsfan, you might be thinking of CRA. If a lien on a dwelling was taken in an abundance of caution the loan can be considered small business because the lien does not affect the call report location.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2240181 - 07/27/20 05:08 PM Re: HMDA CRA Double Reporting terpsfan
burke116 Offline
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Joined: Jun 2014
Posts: 562
Petersburg, VA
We have a commercial LOC for $30,000 underwritten, coded internally, and set to report on the call report as an unsecured commercial loan. In the write-up, it states the LOC is to provide working capital supporting the the business's operating activities- which is the acquisition, rehab, and resale of residential properties.

As it stands, we are set to report this as a small business loan for CRA. However, we took the guarantor's single-family residence as abundance of caution. The home is valued at $600,000.

Seeing as the LOC is for the purposes of acquiring residential property, would we also report this as a purchase transaction for HMDA? I've been told in the past that only multifamily could be reported in both places (CRA and HMDA).

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#2240304 - 07/29/20 01:13 PM Re: HMDA CRA Double Reporting terpsfan
burke116 Offline
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Joined: Jun 2014
Posts: 562
Petersburg, VA
Bump please, thanks smile

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#2240311 - 07/29/20 02:41 PM Re: HMDA CRA Double Reporting terpsfan
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
We're not a CRA reporter but I do have the following FDIC link from 2005 that might give you a starting point.

https://www.fdic.gov/news/financial-institution-letters/2005/fil2905a.html

As we noted in the supplementary information section of the joint
interim rule, because of the change in the Regulation C definition,
loans to refinance small business or small farm loans, where a dwelling
continues to serve as collateral solely through an abundance of
caution, will now be reportable as refinancings under Regulation C.
Those loans will also be reportable for Call Report and Thrift
Financial Report purposes as small business or small farm loans,
resulting in the potential for ``double counting'' of these loans in
CRA examinations. See 69 FR 41184-85.
Two community organization commenters asserted that our CRA
regulations should prohibit such double reporting of small business
loans and small farm loans secured by residential real estate for
purposes of CRA. The agencies are not changing the CRA regulation to
address the commenters' suggestion. The suggested change would likely
increase the data collection and reporting burden for financial
institutions, without increasing the effectiveness of CRA examinations.
As stated in the supplementary information to the joint interim rule,
the agencies do not anticipate that ``double-reported'' loans will be
so numerous as to affect the typical institution's CRA rating. In the
event that an institution reports a significant number or amount of
loans as both home mortgage and small business or farm loans, examiners
will consider that overlap in evaluating the institution's performance.
Accordingly, the agencies are adopting the change based on the
Board's Regulation C revisions without modification. We are adopting
this change as it was published in the joint interim rule.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2240332 - 07/29/20 04:20 PM Re: HMDA CRA Double Reporting terpsfan
burke116 Offline
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Joined: Jun 2014
Posts: 562
Petersburg, VA
Thanks Dan, good information/support for reporting for both.

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