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#2246476 - 12/12/20 05:25 PM CRA Worksheets?
BSA_in_depth Offline
Member
Joined: Jun 2006
Posts: 93
Texas
We're transitioning to a large bank in 2021 and trying to determine if we should implement a "CRA Worksheet" to be required on all small business and small farm loans. Do most banks still use a stand-alone worksheet for each loan or are there better methods that can be use? We use LaserPro and I think most of the data we would need can be found on the Boarding Sheet; however, I feel like a worksheet may prove more beneficial for scrubbing and for data validations. Any recommendations or pros/cons that you can think of?

Also, with consideration to a worksheet, do you recommend requiring the lender to attach documentation "proving up" the revenue they relied on for the credit decision (e.g., attaching copy of tax return)?

Thank you

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#2246481 - 12/14/20 02:02 PM Re: CRA Worksheets? BSA_in_depth
CRAzy_lady Offline
Member
Joined: Dec 2012
Posts: 51
Relying on lenders to provide the information needed for SBSF reporting has not been very successful for me. Our lenders primarily rely on cash flows for decision making, so they often recorded cash flow or even personal income instead of business revenue information. Several years ago, I decided to take them out of the process for the most part.

I obtain a report from our core processing system based on note types and collateral code combinations (which line up with the Call Report logic) and then review each loan file myself to determine the revenue code. There is a "Repayment Source" field on our loan presentation, so I look at that to determine where to look for revenue information. I enter information on a review worksheet myself (and include snips of source docs, such as tax returns, etc). Our examiners have liked this approach.

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#2246793 - 12/21/20 08:28 PM Re: CRA Worksheets? BSA_in_depth
Care4RCommunity Offline
Member
Care4RCommunity
Joined: Apr 2012
Posts: 97
NJ
Are you saying that examiners have asked for proof of revenue to ensure that the correct code was used? I never had that happen to me, but I've learned to never say never!

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#2246989 - 12/29/20 04:57 PM Re: CRA Worksheets? Care4RCommunity
Tennismom Offline
Platinum Poster
Tennismom
Joined: Jan 2004
Posts: 762
Yes.....A few exams ago the FDIC examiner asked for borrowers revenues from the loan platform system ensuring that revenues were being feed properly into our CRA Reporting software. Additionally, the examiner wanted the borrower's financials and/or tax returns to ensure the revenues were properly collected by the lender.

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#2247088 - 01/02/21 04:18 PM Re: CRA Worksheets? BSA_in_depth
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 1,786
Connecticut
I would recommend that you download the free FFIEC CRA software. You can't beat the price and when you enter data it will be populated to represent the CRA loan type, the GAR field, and the geocoding. For small banks that generate only 100 to 200 small business or farm loans annually, it's a practical and affordable approach.

Too many non-reporting banks go into their CRA exams blind, not knowing how their CRA performance looks, and consequently are not prepared for examiner questions. Unless you are a masochist, I would not advise going into a CRA exam (or any exam) blind. So I applaud your efforts to collect the data, but since we are at the beginning of another year, I would suggest you immediately download the free FFIEC software for 2021 (and it may be worth it to download the 2020 version too and enter data for last year).

One other thing: collecting your data and compiling it, and edit-checking it (which the free FFIEC will do for you) is only half the battle. The other half is knowing what the performance expectations (performance standards that are applied to the tests) are. If you need more information about that contact me at LenSuzio@geodatavision.com and I can fill you in.
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CRA Exam Preparation, CRA Performance Evaluations, Key Performance Benchmarks, & maps

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#2247091 - 01/04/21 02:46 PM Re: CRA Worksheets? BSA_in_depth
InFairness, CRCM Offline
Gold Star
InFairness, CRCM
Joined: Nov 2010
Posts: 432
USA
I second Len's recommendation on the FFIEC CRA software.
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Opinions are strictly my own, and have nothing to do with my employer.

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