Doing a second review for a large bank and for selection of revenues over or under $1 million, the bank lets the lender choose that based on the information they used for their loan. This could be inconsistent given there are a lot of branches and lenders making these types of loans. My question is will the examiner look to verify what was used to determine over or under $1 million in revenues?

This is their first data collection year and want to be sure they are following guidelines. Their loan policy does not indicate where to go in the tax returns to get GAR for a farm or a business, etc.

There is no loan write up required for loan approval? They just check a box?

In some cases yes but not all. Large bank in 2 states and a lot of lenders.

Your real risk is fair lending then if you have lenders doing whatever they what too. Large banks always have specific documentation standards. If you do not, how is anyone possibly going to be able to verify your data?

Lenders are not doing whatever they want to and not all loan writeups may include revenue specifically.

My question is if anyone has gone through a large bank CRA exam where the data collection was tested, did that include testing the revenue documentation to verify it?

Just want to have a good idea before adding another item for training, documentation, etc.

Just before I became the CRA officer at my institution, the bank went through an exam and was required to scrub and resubmit the data because of an issue with revenue code. In my experience, examiners do verify that the code aligns with the documentation in the file.

When my bank had to resubmit, it was because we were relying on loan officers to provide the GAR (and they tend to think in terms of income/cash flow so they got it wrong - a lot). I changed the process so that loan officers would no longer be responsible for that field. Instead, during my review, I (or someone on staff) read each loan write up to determine what the revenue source should be and enter it in the data collection system.

Thank you - I worked for a bank that became a large bank in 2004 (I believe) and I remember working to get lenders to use the GAR as opposed to GAI and how to do that but it was too long ago for me now to remember much more than that. The bank only collected and reported one year because the following one they created the ISB category. I've not had to think about it since then.

Well, then the documentation standards need to change because, yes the regulator will test revenues reported and require a scrub if they do not agree with your results. You want to have a formal process for determining revenues that is equally applied to all applicants. You do not want this process left to second guessing or try to recreate revenues after the fact.

Examiners will look to the bank to provide something that shows the revenue matches the code used. That might be a tax return or it might be something within the loan approval document. It could even be just the GAR as stated on the loan application. As an example we have a smaller dollar small business loan program that doesn't require a full cash flow review or revenue information. I do require the lender to get a stated GAR and include that on the application. I use that figure, but there is not requirement in the regulation to prove that number by having tax returns or other documents.
However, consistency is very important. You never want to use GAI, always GAR.

Your question was answered, but I hear a little voice in my hear reminding me that it's the bank making the loan, not the lender. When you say, " not all loan writeups may include revenue specifically" are these large loans or small? I don't know that I ever saw a commercial loan we wanted to make where income, and ability to pay, were not addressed. ANd that harkens back to the fair lending concern - equal treatment. That could be questioned when similar requests are evaluated differently and one lender may be approving it while another is denying it, and you must ask why.