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#2155083 - 11/28/17 06:18 PM Commercial Lending - GMI data collection
BAY Offline
100 Club
Joined: Jan 2006
Posts: 145
Often times a commercial lender will sit across from a client and discuss their needs, either onsite, offsite, etc....the client might indicate that they are looking for a loan to finance an apartment building for example. Sometimes the conversations are formal some are more casual.

If the client indicates that they are looking for a loan, the lender would probably leave them with a PFS or a Business Banking application to be completed. In some commercial settings the lender is not going to sit with the applicant and have them complete the PFS or Business Banking application for the credit request...so the client will complete at a later date and drop off at the bank. (in other cases, the lender may sit across from the applicant and complete, those are straight forward - face to face application collect GMI at that time if HMDA reportable).

In cases, where the lender leaves a PFS or Business application to be completed later by the applicant, is this considered a face to face application, because the lender had those initial discussions and left the pfs or business banking application. Or is this considered a mailed in application since the borrower completed and dropped off at the bank at a later date.

When should the lender ask for GMI. If the lender knows that the borrower is looking to finance a HMDA reportable loan, should they leave the GMI data collection sheet with the PFS or business application. If they do not, would it be okay for the lender's admin to follow up to obtain GMI information once we receive the PFS or application back at the Bank. If this is permissible, and the admin calls the applicant (is this really a telephone application or would it be a face to face since the lender originally met with the applicant). If it's face to face and the applicant chooses not to provide, I would assume the lender would then need to document based on visual observation.

Because commercial and business banking application processes are different from retail, we are trying to determine how to handle. I realize this isn't anything new. I'm asking because we are implementing a new commercial system and basically the lender brings the info back to the admin to input into the system....so we are looking at procedural changes.

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#2155111 - 11/28/17 07:06 PM Re: Commercial Lending - GMI data collection BAY
Banker K, CRCM Offline
Gold Star
Joined: Jan 2010
Posts: 293
Oklahoma
My thoughts:

If the lender had all necessary pieces of information (my understanding is that this is defined by the bank and should match actual bank procedures) to constitute an application at the time of the face to face meeting, then they have an application at that time and should request the GMI at that time.

If they don't have the necessary pieces of info, then it's not an application yet. If they are taking a blank application form and you know that it will be HMDA reportable with an individual as a borrower, then yes you would include the GMI disclosure with the application. When the customer brings the form back with the completed info, the banker should make sure to write in the "received" date on the application b/c often the customer will date it one day and bring it in a few days later. Your app date would be the date it was actually received by the bank (with the completed info).
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All comments are mine & should not be taken as legal advice.

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#2155138 - 11/28/17 07:41 PM Re: Commercial Lending - GMI data collection BAY
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,965
Bloomington, IN
If the lender had all necessary pieces of information (my understanding is that this is defined by the bank and should match actual bank procedures) to constitute an application at the time of the face to face meeting, then they have an application at that time and should request the GMI at that time.

That would depend entirely on the conversation between the loan officer and the client. If the client tells the loan officer they are looking for a $300,000 loan for 15 years to purchase 123 That St and ask what terms may be possible and if all the loan officer does is discuss those possible terms and the discussion ends there then there is no covered loan application. It is simply an inquiry.

If the loan officer leaves the application to be completed and returned at a later date then the application was not completed face to face and the GMI would not be noted by the loan officer at a later date unless there was another face to face meeting with the applicant during the application process.

I do agree that if the loan officer through their conversation with the potential applicant determines the pending loan request would be a covered loan request that they should leave the GMI collection form with the appropriate disclosure with the applicant to complete and return with the application.
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The opinions expressed are mine and they are not to be taken as legal advice.

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