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#92359 - 06/27/03 07:23 PM HMDA Reportable or Not?
Anonymous
Unregistered

At this institution:
Unsecured loans have a purpose code of "02" regardless of the actual purpose. They have a collateral code of "110". As I understand it,loans are reported to the credit bureau are reported by purpose codes. I'm told that reporting an unsecured loan to the credit bureau any other way would make that loan show up as a secured loan.

When I've pulled applications, the loan officer has place a phrase that indicates the purpose of the loan for example is home improvement...such as the purchase of a central heating unit for the home.

In the Getting It Right Guide, it states the definition of a home improvement loan is a loan made for the purpose of home improvement AND is classified by the institution as a home-improvement loan.

Should I report it on HMDA or not? I'm thinking not, because it is not "classified" as such. However, my mind says it really is......

What should I do?


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General Discussion
#92360 - 06/27/03 07:33 PM Re: HMDA Reportable or Not?
Johncrcm Offline
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Eastern KY
Our I/T input plays games somedays, one loan will be a Home Improvement to install the heat pump and unsecured; the next loan for an unsecured loan for the purpose of home improvement will be input with a different code. For "getting it right" , your example should be included on your LAR and the HMDA report as a home improvement. The classification at the input level is the devil. We are probably the only bank that has this trouble.

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#92361 - 06/27/03 07:36 PM Re: HMDA Reportable or Not?
David Dickinson Offline
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David Dickinson
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Posts: 18,762
Central City, NE
I understand the rule that says "AMD it is classified as HI", but I've never seen a bank cited for reporting a HI loan that was classified as HI. However, you should be consistent.
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#92362 - 06/27/03 07:42 PM Re: HMDA Reportable or Not?
Dan Persfull Offline
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Bloomington, IN
First I believe all home improvement loans should be classified as such and reported. With that said:

Anon, do you otherwise "classify" your unsecured loans as home improvements for HMDA reporting purposes? If you do not then I would not report this loan.

As you said the loan must be classified as a HI loan by the FI to be reportable. A simple notation in the file for the purpose of the loan is not classifying the loan IMO.

The loan has to be classified by file color codes, identifying "stickers" on the folders or systematice codings, etc. in order to be reportable IMO.

Other thoughts on this. I'm really just throwing this out for discussion.
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#92363 - 06/27/03 07:44 PM Re: HMDA Reportable or Not?
hmdagal Offline
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hmdagal
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If you want to classify loans as home improvement for HMDA purposes you can use any method you like. It doesn't have to be with a specific code on your loan system, it could be something as simple as using a red file folder instead of a manilla one, as long as you have a procedure in place and follow it consistently.

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#92364 - 06/27/03 07:53 PM Re: HMDA Reportable or Not?
Dan Persfull Offline
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Bloomington, IN
That's my point. It has to be classified/identified as a HI loan, and I don't think the purpose of the loan on the application or in the credit memo qualifies as classifying.
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#92365 - 06/27/03 07:53 PM Re: HMDA Reportable or Not?
Anonymous
Unregistered

The only procedure we have in place is that if the application states it is home improvement than it is reported.

With that said...I will report.

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#92366 - 06/27/03 07:55 PM Re: HMDA Reportable or Not?
Anonymous
Unregistered

Quote:

I don't think the purpose of the loan on the application or in the credit memo qualifies as classifying.




Oops!!!!! Maybe I won't????????????????

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#92367 - 06/27/03 08:03 PM Re: HMDA Reportable or Not?
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:

The only procedure we have in place is that if the application states it is home improvement than it is reported.

With that said...I will report.





If I'm an examiner (or compliance officer) and I want a list of loans classified as HI loans, how will you get those for me? I don't want your LAR listing, I'm wanting these classified loans to insure they are on the LAR and the information is accurate. How would I know what files to look at without doing a 100% file review for the year?
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#92368 - 06/27/03 08:07 PM Re: HMDA Reportable or Not?
Dan Persfull Offline
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Dan Persfull
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Posts: 47,517
Bloomington, IN
Quote:

Oops!!!!! Maybe I won't????????????????




Anon, you posted while I was typing. The point I'm trying to make, is you somehow have to identify the loans as HI loans.

As I said, I beleive all HI loans should be classified and reported as such.

As a suggestion, you may want to start classifying these loans by color folders, putting a color sticker on the folder or simply give them their own filing area.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#92369 - 06/27/03 08:41 PM Re: HMDA Reportable or Not?
Anonymous
Unregistered




If I'm an examiner (or compliance officer) and I want a list of loans classified as HI loans, how will you get those for me?




I have a code "17" that is the code used for HI loans. I would pull the query
Now, if you were the examiner you would not know that in code 02 there are home improvement loans unless you looked specifically into one of the folders ...probably the chances of you finding that would be slim .......Right??????

But, you understand, that as a Compliance Officer, I am worried that you are really a "go-getter" and will find one of those loans.....

Ok... now I won't report them.......I'll take my chances....

Thanks for the help!!!!!!!!!!!!!!


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#92370 - 06/30/03 03:02 PM Re: HMDA Reportable or Not?
SMQ, CRCM Offline
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Between the lines
Dan, good idea about the color folders, however; we should also consider a method to identify the files in the system rather than hard copy. For example, our examiners do not ever see a "hard" file. We image our loan docs and provide images to examiners. We also provide temporary access to image system during exam and they review files from a remote branch using one of our PCs with their own login. I think a code in the system works best for us. With the increasing reliance on technology, we will need to rethink the way we do things.
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#92371 - 06/30/03 03:33 PM Re: HMDA Reportable or Not?
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
SoccerMom, I agree the best place to identify them is in the system.

All "consumer" loans are class 20 on our system, but we have separate purpose codes that identify the loan as an auto, home improvement, etc.

I made the other suggestion becasue I took from the original post that Anon had a system limitation of identifying these loans on the system.
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The opinions expressed are mine and they are not to be taken as legal advice.

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