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#97734 - 07/16/03 06:04 PM CRA reporting employee loan
Tillie Offline
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Tillie
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Posts: 266
With HmDA, we may use NA for employee income. Does CRA have a similar code when reporting data of gross revenue for small business/farm loans to employees? Or must we pick one of the two codes for $1 million or less or over $1 million OR the code for NA if it is a new business?
Thanks !

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Lending Compliance
#97735 - 07/16/03 06:28 PM Re: CRA reporting employee loan
Don_Narup Offline

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Las Vegas Nevada
IMO that would depend on the income you are using to qualify the loan. If the loan is to a small business entity then it is not an employee of the bank and you would use the income code.

If the loans is to your employee for a small business purpose then NA would be OK but you would us a code 3 (Not Known)

Which brings up another point as you are only indicating income of $1,000,000 or less or Greater than $1,000,000. I don't think you are disclosing anything confidential and you should enter code 1 $1,000,000 or Less
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#97736 - 07/16/03 06:28 PM Re: CRA reporting employee loan
COMPLIcated Offline
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Joined: Mar 2003
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OK
We have the same situation at our bank on a small farm loan so i would be interested in your opinions as well.

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#97737 - 07/16/03 07:45 PM Re: CRA reporting employee loan
Tillie Offline
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Tillie
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Posts: 266
I tried entering NA in the Revenue Code field on the CRA software, and it would not accept it.

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#97738 - 07/16/03 08:28 PM Re: CRA reporting employee loan
COMPLIcated Offline
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Joined: Mar 2003
Posts: 1,035
OK
Are you speaking of the income amount or the Gross Annual Revenues? I do not think that income amount is required for reporting purposes and so can probably be left blank and then document it is an employee loan and if asked during an examination, let them see the amount by appropriate officer. For GAR, there is a N/A option - on our software at least which is Census Traks Plus II.

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#97739 - 07/16/03 11:30 PM Re: CRA reporting employee loan
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
Unless something new has been released that I am unaware of, there is no exemption for reporting the revenues on any business lending. You have a choice of a code 1 for below one million in gross revenues, 2 for above and 3 for revenues unknown or not used in the credit decision. (I'm paraphrasing the last, but that's the gist).

If the revenues of the business were taken into consideration in making the loan, the appropriate code needs to be included on your LR.

If the revenues were not taken into consideration (and if not, you'd best hope there are NO financials on the business in the file) then the 3 is an appropriate code.

In all reality, there is no confidentiality problem with reporting revenues. A business entity is a seperate body in the eyes of CRA from a person. You aren't reporting specific revenues, you're reporting above or below one million. It's probably well known that the business revenues are one or the other if the employee has been with you for more than a few days. My guess being that if he/she were running a multi-million dollar business...they wouldn't have time to be a banker as well. If they wanted this to be a secret, they could easily have gone elsewhere for their loan.

In the eyes of CRA it's important to know how many true small businesses a bank is really lending to. Since the reporting is guided by loan size and not revenues, using the revenues to further sort your data is the only way to get to the information. Hence the lack of an ability to waive reporting.
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#97740 - 07/17/03 06:30 PM Re: CRA reporting employee loan
Tillie Offline
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Tillie
Joined: Apr 2003
Posts: 266
Thanks, Dawnie, you always put things in perspective which, in this case, is a good thing.

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#97741 - 07/17/03 08:23 PM Re: CRA reporting employee loan
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
Glad to help Cathy
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CRA Rating is in...Oh who cares...I'm home with the baby.

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