Skip to content
BOL Conferences
Learn More - Click Here!

New Reply Thread Options
#2189295 - 08/15/18 09:15 PM CRA credit for entire HMDA LAR?
CRA Craig
Unregistered

I once had a CRA examiner tell me to be sure not to put any HMDA loans on my list of community development loans (a list created solely for CRA exam purposes, since we weren't a CRA reporting bank). He said don't put the HMDA loans on there because "I'm already giving you credit for all your HMDA loans, and if you put it on the CRA list, then that would be counting it TWICE!"

From this exam experience, I've come to believe that HMDA reportable originations are all counted favorably towards a bank's CRA efforts. But is that true?

I can find nothing in the reg that supports this.

And, if yes: reporting of HELOCs is optional for HMDA, so we don't do it. So do I also add all our HELOCs to the CRA list, since, if they had been reported for HMDA, they would have had this alleged automatic credit?

(I'm currently at another small community bank - a HMDA reporter, but not a CRA reporter. FDIC. Dallas Region.)

Return to Top Reply Quote Quick Reply Quick Quote
#2189400 - 08/16/18 05:13 PM Re: CRA credit for entire HMDA LAR? Anonymous
Anonymous
Unregistered

bump

Return to Top Reply Quote Quick Reply Quick Quote
#2189525 - 08/17/18 01:18 PM Re: CRA credit for entire HMDA LAR? Anonymous
Anonymous
Unregistered

Friday bump! Hey if it's a stoopid question, just tell me, yeah? I can take it! Ha ha

Return to Top Reply Quote Quick Reply Quick Quote
#2189530 - 08/17/18 01:28 PM Re: CRA credit for entire HMDA LAR? Anonymous
JobSecurity Offline
Platinum Poster
Joined: Oct 2009
Posts: 604
I only put multi-family on my CRA list. I do keep a copy of the HMDA loans in the distressed/underserved areas for my own purposes (so I know how many) along with the low rental loans. We are also small, HMDA reporter, and non-CRA reporter in the Dallas Region.

Return to Top Reply Quote Quick Reply Quick Quote
#2189798 - 08/20/18 06:40 PM Re: CRA credit for entire HMDA LAR? Anonymous
Anonymous
Unregistered

OP here: thanks. This is a bump. Anyone else?

Return to Top Reply Quote Quick Reply Quick Quote
#2190654 - 08/27/18 02:38 PM Re: CRA credit for entire HMDA LAR? Anonymous
Anonymous
Unregistered

bump. I suppose the lifespan of this thread is a testament to the opacity of the CRA regulations for community banks, eh?

Return to Top Reply Quote Quick Reply Quick Quote
#2190659 - 08/27/18 03:00 PM Re: CRA credit for entire HMDA LAR? Anonymous
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Originally Posted By CRA Craig
I once had a CRA examiner tell me to be sure not to put any HMDA loans on my list of community development loans (a list created solely for CRA exam purposes, since we weren't a CRA reporting bank). He said don't put the HMDA loans on there because "I'm already giving you credit for all your HMDA loans, and if you put it on the CRA list, then that would be counting it TWICE!"


You have probably seen them, but look at FAQ .22(a)(2)-7 and FAQ .42(b)(2)—2 where they say that some HMDA transactions can be "double counted" - meaning that the examiners statement wasn't completely correct.

§ ll.22(a)(2)—7: How are refinancings of small business loans, which are secured by a one-to-four family residence and that have been reported under HMDA as a refinancing, evaluated under CRA?

A7. A loan of $1 million or less with a business purpose that is secured by a one-to-four family residence is considered a small business loan for CRA purposes only if the security interest in the residential property was taken as an abundance of caution and where the terms have not been made more favorable than they would have been in the absence of the lien. (See Call Report Glossary definition of ‘‘Loan Secured by Real Estate.’’) If this same loan is refinanced and the new loan is also secured by a one-to-four family residence, but only through an abundance of caution, this loan is reported not only as a refinancing under HMDA, but also as a small business loan under CRA. (Note that small farm loans are similarly treated.) It is not anticipated that ‘‘doublereported’’ 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 loans, examiners will consider that overlap in evaluating the institution’s performance and generally will consider the ‘‘double-reported’’ loans as small business loans for CRA consideration.

The origination of a small business or small farm loan that is secured by a oneto-four family residence is not reportable under HMDA, unless the purpose of the loan is home purchase or home improvement. Nor is the loan reported as a small business or small farm loan if the security interest is not taken merely as an abundance of caution. Any such loan may be provided to examiners as ‘‘other loan data’’ (‘‘Other Secured Lines/Loans for Purposes of Small Business’’) for consideration during a CRA evaluation. See Q&A §ll.12(v)—3. The refinancings of such loans.




§ ll.42(b)(2)—2: If a loan meets the definition of a home mortgage, small business, or small farm loan AND qualifies as a community development loan, where should it be reported? Can Federal Housing Administration, Veterans Affairs, and Small Business Administration loans be reported as community development loans?

A2. Except for multifamily affordable housing loans, which may be reported by retail institutions both under HMDA as home mortgage loans and as community development loans, in order to avoid double counting, retail institutions must report loans that meet the definition of ‘‘home mortgage loan,’’ ‘‘small business loan,’’ or ‘‘small farm loan’’ only in those respective categories even if they also meet the definition of ‘‘community development loan.’’ As a practical matter, this is not a disadvantage for institutions evaluated under the lending, investment, and service tests because any affordable housing mortgage, small business, small farm, or consumer loan that would otherwise meet the definition of ‘‘community development loan’’ will be considered elsewhere in the lending test. Any of these types of loans that occur outside the institution’s assessment area(s) can receive consideration under the borrower characteristic criteria of the lending test.
See Q&A §ll.22(b)(2) & (3)–4.
Limited purpose and wholesale institutions that meet the size threshold for reporting purposes also must report loans that meet the definitions of home mortgage, small business, or small farm loans in those respective categories. However, these institutions must also report any loans from those categories that meet the regulatory definition of ‘‘community development loan’’ as community development loans. There is no double counting because wholesale and limited purpose institutions are not subject to the lending test and, therefore, are not evaluated on their level and distribution of home mortgage, small business, small farm, and consumer loans.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top Reply Quote Quick Reply Quick Quote
#2190662 - 08/27/18 03:21 PM Re: CRA credit for entire HMDA LAR? Anonymous
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Originally Posted By CRA Craig
From this exam experience, I've come to believe that HMDA reportable originations are all counted favorably towards a bank's CRA efforts. But is that true? I can find nothing in the reg that supports this.


HMDA data can be used to show where your loan originations take place as well as to which demographics of customers. Different rules apply based on the size of the institution. For example, the CD test does not apply to small institutions but does to intermediate-small banks.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top Reply Quote Quick Reply Quick Quote
#2190719 - 08/27/18 06:58 PM Re: CRA credit for entire HMDA LAR? Anonymous
Anonymous
Unregistered

OP here: Thanks, Adam! Reading what that doesn't say, I'm thinking that the examiner's approach, of giving us (an intermediate small bank for CRA purposes) CRA credit for every transaction on the LAR could not have been correct.

Our LAR transactions would include:
- consumer home purchase & refi
- commercial purchase of property containing a dwelling
- commercial refi where both old & new loan where secured by a dwelling, regardless of purpose, regardless of business size
- consumer or commercial loan to renovate a dwelling, if secured by a dwelling

Examiner was saying he was already counting the HMDA loans for CRA credit. Based on answers received in this thread, on a few of them, only certain ones, should have been counted, is that right? Does anyone disagree?

Return to Top Reply Quote Quick Reply Quick Quote
#2190720 - 08/27/18 06:59 PM Re: CRA credit for entire HMDA LAR? Anonymous
Anonymous
Unregistered

OP here. P.S. I'm referring to what Adam's first set of excerpts doesn't say - it says we should get CRA credit for certain loans, like multifamily affordable and small business, even if they already appear on the LAR. So I'm saying it "doesn't say" that we get credit for the entire LAR, thus I should not be expecting that type of "whole LAR" credit in our upcoming CRA exam's CD test, right?

Return to Top Reply Quote Quick Reply Quick Quote
#2190723 - 08/27/18 07:15 PM Re: CRA credit for entire HMDA LAR? Anonymous
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Originally Posted By Anonymous
OP here. P.S. I'm referring to what Adam's first set of excerpts doesn't say - it says we should get CRA credit for certain loans, like multifamily affordable and small business, even if they already appear on the LAR. So I'm saying it "doesn't say" that we get credit for the entire LAR, thus I should not be expecting that type of "whole LAR" credit in our upcoming CRA exam's CD test, right?


For the CD test? No, you won't get credit for your entire LAR unless it meet's the definition of a CD loan.

However, as an intermediate small bank, your HMDA loans will be used in the lending test. Take a look at the small bank performance standards here: https://www.bankersonline.com/regulations/12-228-026

Also, look at the definition of community development loan here: https://www.bankersonline.com/regulations/12-228-012
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top Reply Quote Quick Reply Quick Quote
#2190724 - 08/27/18 07:17 PM Re: CRA credit for entire HMDA LAR? Anonymous
Anonymous
Unregistered

OP here: Ok, that makes more sense than what I heard. Thanks!

Return to Top Reply Quote Quick Reply Quick Quote
#2190726 - 08/27/18 07:20 PM Re: CRA credit for entire HMDA LAR? Anonymous
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Also, have you reviewed CRA performance evaluations from your regulator for other intermediate small banks? I find that reading performance evaluations is the best way to understand what your regulator wants. If you are an OCC bank, they say the size of bank (i.e. test used) in their list of banks examined for CRA compliance. The FDIC list is okay, but it is harder to determine which bank is an intermediate small bank.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top Reply Quote Quick Reply Quick Quote
#2191300 - 08/30/18 07:38 PM Re: CRA credit for entire HMDA LAR? Anonymous
Anonymous
Unregistered

OP: Whoa. Great minds, man, great minds. I read this today AFTER starting to obtain some of those.

Return to Top Reply Quote Quick Reply Quick Quote
#2191308 - 08/30/18 08:08 PM Re: CRA credit for entire HMDA LAR? Anonymous
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
wink
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top Reply Quote Quick Reply Quick Quote
#2201719 - 12/28/18 09:28 PM Re: CRA credit for entire HMDA LAR? Anonymous
WABComply Offline
100 Club
Joined: Jul 2017
Posts: 229
One again I seem to be reviving an oldie. I need an opinion. We have loan, a temp construction loan from another bank that we are making permanent. The subject is a multifamily in a Low to moderate area (77 units/2 buildings). The loan is being reported on the HMDA LAR as purchase. I want to double report as a CDL. Problem is I do not have the data to verify affordable housing and don't think it will qualify. Any way I possibly get away with reporting as Revitalization or does it have to be affordable housing to "double report"?

Return to Top Reply Quote Quick Reply Quick Quote
#2201874 - 01/02/19 04:21 PM Re: CRA credit for entire HMDA LAR? Anonymous
WABComply Offline
100 Club
Joined: Jul 2017
Posts: 229
Found it in the Q&A please disregard. Affordable housing only.

Return to Top Reply Quote Quick Reply Quick Quote
Quick Reply:
HTML is disabled
UBBCode is enabled




Moderator:  MagicCity, P*Q, Truffle Royale