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#2259758 - 09/15/21 07:47 PM Action Taken Date LOC and Term Loan Renewals
IGaev Offline
Member
Joined: Dec 2016
Posts: 55
The Guide to CRA Reporting states the following:

- An institution should collect information about small business and small farm loans that it refinances or renews as loan originations.
- Institutions must collect and report data on lines of credit in the same way that they provide data on loan originations.
- Lines of credit are considered originated at the time the line is approved or increased; and an increase is considered a new origination.

The FFIEC 01/2021 CRA Micro Data guidance defines action date as: Date Originated or purchased.

In terms of lines of credit or renewed/extended term loans, I'm trying to confirm what should be used as the action taken date. In terms of the lines...approved date and originated dates seem to contradict one another.

When lines of credit are renewed, we issue an letter informing the borrower of the renewal and we typically use the date of the letter (i.e., origination date) for the action taken date. A new note is "not" executed. Is that correct or should we rely on the date the renewal was approved by the Bank, based on the CRA Reporting Guidance? Thoughts?

If the customer enters into a Modification Agreement that also contains an extension of term, the body of the Agreement may reflect an effective date that is different than the date of the Agreement or the date the Agreement was executed by the borrower. Should we use the effective date denoted in the Agreement as the action taken date, the date of the Agreement, or the date executed?

Thank you and we appreciate any assistance!

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CRA
#2259928 - 09/20/21 05:05 PM Re: Action Taken Date LOC and Term Loan Renewals IGaev
Lori01 Offline
100 Club
Joined: Jan 2007
Posts: 175
VT
I question if your line of credit renews are really renewals, or just reviews, if no new note or modification is signed. A review is not a reportable activity.
We tend to issue an open ended note on our lines of credit. There is no maturity date but we do an annual (or every other year) review of the line. We send a letter letting the customer know it's been reviewed and when to expect the next review. We don't actually extend the maturity date (since its open ended), or increase the line amount. As a result, these are not reportable.

If we have the customer sign a mod or new note AND extend the maturity date or change the amount, then we report the action date as the date they signed/executed that new mod or note.

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