Terpsfan states they report non-dwelling secured home improvement loans, which to me would mean they classify such loans as HI loans therefore those loans would be subject to HMDA.
Outside of sound lending practice as ACBank alludes to there is no requirement to get the purpose of the loan for loans under $10,000. However, if you are a HMDA bank you are required to report certain type loans, therefore if you don't get the loan's purpose how can you effectively comply with reporting requirements?
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The opinions expressed are mine and they are not to be taken as legal advice.