We've been having some discussion on the proper way to report CRA data for multi loan lines of credit (One commitment amount [Line of Credit] with multiple individual loans funded from the LOC balance). If you have these types of transactions, how do you report?
These loans can potentially be repaid during the year and re-advanced as a new loan. These lines are typically made to builders who advance individual loans for each construction project.

The full commitment amount or the individual advances/loans as they are made?

The main address of the borrower or the addresses for the individual loans?

Do you report the same money more than once if individual loans are paid off and new loans are originated using the “same” funds?

*If the advances are secured by the construction project, you would not report them at all (ineligible Call Report code.)

*If the original master credit agreement is over $1Million, then you would not report the individual loans either.

*If the original credit agreement is under $1Million, the reporting may depend on how you documented the credit. If you have a master note, and these are only advances, then you would report the one loan.

*If these advances are documented as separate notes and transactions, then you would report each one.

PLEASE NOTE - The last two bullet points are NOT covered in the Q&A or in any official type of guidance since the CRA data collection rules are a crude series of round holes and many of our loans are square pegs that simply don't fit.

The above criteria is based on many conversations with attorneys, examiners and other CRA and compliance officers over the years.

An operating line to a construction company would however be reportable. You have to consider the purpose, collateral and borrower when deciding how to report. We don't have everything necessary here to say one way or another.

We offer credit cards in a similar manner to large companies. For deals like this you have two options that are dependant on your system and it's abilities.

Bonnie's last two comments (and the first two) are spot on when this issue comes into play. If you report each draw as a seperate loan number, than reporting the deal (IF IT WAS REPORTABLE depending on collateral and purpose) would be ok if that's what your system does the easiest.

If you don't assign a seperate number to each deal, you would report the one large approval and any additional extentions or raises in credit limit.

What address do you use? That's up to you. Either of the addresses are acceptable. The general office of the business or the use of the funds address are both allowed reporting addresses.

Thank you for the information. Generally the individual advances are given separate loan numbers for identification purposes, which is why, if the purpose/collateral would be reportable, that I thought we should report the individual advances/loans rather than the >$1 million master.
It also would make more "logical" sense to me to use the address of where the funds are used rather than the master address as that could affect lmi areas vs. hmi areas.

Just remember when talking with an examiner, you choose to report the deals individually because of a system limitation, verses building up your CRA numbers That seems silly, but it's important. We're not allowed to manipulate our numbers and reporting based on possible outcome (ie more loans), but instead are supposed to report as accurately and fairly as possible.

With your system (much like mine) it might be hard to not double count a loan (the master and the other advances on top of that) if you're assigning new loan numbers to each, so you're fairly reporting

Same issue on the address. We follow the proceeds when reporting, and only make an exception to this when the proceeds leave the state. You have to do the same. Don't use the business address on all deals where that addres happens to be LMI, and then book another loan to a different business in the same manner, following the proceeds because they hit LMI areas. Just be consistent and you'll have no issues in data integrity

thanks dawnie!!! this is why you are definitely the "queen"