Skip to content
BOL Conferences
Thread Options
#2214000 - 05/20/19 03:27 PM Source Document-CD vs Note/Credit Agreement
comply1 Offline
Junior Member
Joined: Sep 2017
Posts: 30
Looking for opinions in regards to the 'Action Taken Date' for originated files. Are you guys using the funding date from the CD or the date of the Note for closed end and date of Credit Agreement for open end? Also any pros/cons to using one over the other

Return to Top
HMDA

   
HMDA Academy
#2214007 - 05/20/19 04:23 PM Re: Source Document-CD vs Note/Credit Agreement comply1
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Great question. As you know, the commentary to 1003.4(a)(8)(ii) explains that you can use either the closing/account opening date or the date of initial disbursement.

From the commentary:
"For covered loan originations, including a preapproval request that leads to an origination by the financial institution, an institution generally reports the closing or account opening date...... If the disbursement of funds takes place on a date later than the closing or account opening date, the institution may use the date of initial disbursement."

Personally, I have long advocated for using the note date. It is just easier than finding the actual date of disbursement, which doesn't always occur when rescission expires. The note date is also easier on your auditors/examiners as they just review the note and don't have to dig for a disbursement check to ensure it aligns with the funding date with the CD (which could be different if disbursement is delayed for whatever reason).

Using the origination date (on the note) also helps to avoid end-of-year issues where a loan closes in one year, but disburses in the next.
_________________________
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
#2214010 - 05/20/19 04:40 PM Re: Source Document-CD vs Note/Credit Agreement comply1
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Personally, I have long advocated for using the note date. It is just easier than finding the actual date of disbursement

I concur. As Adam said the note date is just easier to identify and IMO a more consistent approach to avoid year end issues.

Notwithstanding this flexibility regarding the use of the closing or account opening date in connection with reporting the date action was taken, the institution must report the origination as occurring in the year in which the origination goes to closing or the account is opened.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#2214011 - 05/20/19 04:42 PM Re: Source Document-CD vs Note/Credit Agreement comply1
Skittles Online
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
And not that you need it - but I also agree. It is so much easier using the note date.
_________________________
My Opinions Only

Return to Top
#2214013 - 05/20/19 05:07 PM Re: Source Document-CD vs Note/Credit Agreement comply1
comply1 Offline
Junior Member
Joined: Sep 2017
Posts: 30
Thanks guys. I agree, I have always used the Note, but am working on something where someone is insisting on using the funding date. As you guys stated the Note has always been easier for me as well....and let's face it, I am all about finding the easiest way in regards to HMDA. But, I just wanted to get other opinions to make sure I wasn't missing their point. All they could state was that it isn't wrong to use the funding date, and of course I agreed because it isn't wrong...but again was looking for why would you? You guys have helped, thanks again

Return to Top
#2214044 - 05/20/19 09:02 PM Re: Source Document-CD vs Note/Credit Agreement comply1
Bankerlori Offline
Junior Member
Joined: Sep 2015
Posts: 35

We used to use the funding date too but I finally was able to get "them" to switch to note date. Amazingly, all the audit findings self-resolved ---imagine that wink Good Luck.

Return to Top
#2225148 - 11/05/19 08:43 PM Re: Source Document-CD vs Note/Credit Agreement comply1
RegComply Offline
New Poster
Joined: Jan 2012
Posts: 19
Southeast
Is there any rule that you need to use the funding date in a "dry state"?

Return to Top
#2225150 - 11/05/19 08:49 PM Re: Source Document-CD vs Note/Credit Agreement comply1
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,351
We use the settlement (closing) date from the CD.....which is typically, almost always, the note date.
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top