Good morning everyone,

I have a question regarding loan purpose.

It looks like a new loan purpose selection has been added as of 8/2017 (version 3.1 of filing instructions) The code is 5, which is "Not Applicable".

Looking over Paragraph 4 (a)(3), I do not see any commentary or guidance on how/when this code should be used. So I am wondering if we would use "NA" in the same manner as we do for certain, other data fields that require "NA" to be reported when the application is withdrawn by the application or closed for incompleteness. Would anyone happen to know? Are there specific guidelines as to when this code should be used?

Thank you!

The CFPB has a guide that explains NA codes: https://s3.amazonaws.com/files.consumerf...rence-chart.pdf

From this guide:

Enter “NA” for purchased covered loans where origination took place prior to January 1, 2018, Comment 4(a)(3)-6.

Very good question. Bizarre!

Along those same lines, I'd like an example of a Business/Commercial purpose that falls into (2) Not primarily for a business or commercial purpose.

Joker, I thought code 2 in the Business/Commercial purpose field (#48) would be used for all consumer-purpose loans. Basically, if not subject to Reg Z, code 1. If subject to Reg Z, code 2.

Am I missing something?

Thanks Adam. This is helpful info.

So if my institution never purchases covered loans, this code should never be used. Correct?

Thanks!

Correct.

Didn't even think about it in that context, Adam. That is the most likely explanation! !

Thanks David! Great meeting you at the recent ABA Foundational Course BTW.

What about for loans purchased after 1/1/2018? If nothing else is taking place, would you report the purpose as "Other," or do you report based on what it was when originated, i.e. get the info from the seller/existing documentation?

We use the documentation from the seller to report the original purpose.

I would agree you're going to need to get the information from the seller/file documentation. As Adam stated, you can only use NA for loans you purchase that were made prior to January 1, 2018.

Yeah, I wasn't calling for using "N/A," but thought that the Regulation could potentially be requiring this to be a form of an actual transaction where you would classify it an "Other" for Loan Purpose.