We have a line of credit, secured by residential property but not HMDA reportable because our bank is not required to report LOC for HMDA. Staff used a Call Report Code of 4A....so reportable for CRA.
BUT the reporting grid says res real estate loans are HMDA but not CRA reportable.... but again we are not reporting in HMDA.

Now what? Do I report it in CRA? Normally I would have just reported (because of the 4A) and not even noticed but by a fluke I saw this loan.

I think maybe they went with the 4A because the primary collateral was all business assets...but they didn't come out and say "abundance of caution " for the res real estate. . Can't go back and change the loan approval docs now to add that.

Ever feel like you are chasing your own tail?

We are a large bank.

My first question, is the loan even coded properly? What is the amount of the loan and the value of the residential property - minus other liens?

4 Commercial and industrial loans. Report loans for commercial and industrial purposes to sole proprietorships, partnerships, corporations, and other business enterprises, whether secured (other than those that meet the definition of a “loan secured by real estate”) or unsecured, single-payment or installment.

Loan Secured by Real Estate: For purposes of these reports, a loan secured by real estate is a loan that, at origination, is secured wholly or substantially by a lien or liens on real property for which the lien or liens are central to the extension of the credit – that is, the borrower would not have been extended credit in the same amount or on terms as favorable without the lien or liens on real property. To be considered wholly or substantially secured by a lien or liens on real property, the estimated value of the real estate collateral at origination (after deducting any more senior liens held by others) must be greater than 50 percent of the principal amount of the loan at origination.

There is a LOC is for $250,000 AND a loan for $150,000.
The house is valued at $329,500 and has equity of $117,500, so less than 50%. The equity doesn't even cover 30% of the LOC and loan.

I have never been able to find a definition of abundance of caution. Is it fair to say that any line/loan taking the residence as collateral is for abundance of caution if the equity is less than 50%?

An abundance of caution is when the loan would of been approved without the use of collateral, but a lien was put into place as an abundance of caution because the bank was on the fence about it's original decision. This is only necessary when determining HMDA/Small business reporting.

Home Equity Lines of Credit can be reported under HMDA which it sounds like your institution chose not to which unlocks the door for reporting this loan as community development if used for a small business purpose. If the loan has a valid CD purpose you could report the entire amount of the LOC as CD. Conversely, if the loan does not have a valid CD purpose it may at your option be collected as ‘‘Other Secured Lines/Loans for Purposes of Small Business.’’ This is a supplementary report that you can give to your examiners, but is not reported.

Also, this example falls outside of the loan data collection grid because it is not at risk of double reporting with HMDA--thus we don't worry about the dollar value threshold of 1MM for small business, or 500M for small farm.