We currently have a loan that the bank has a participation. Are we able to report our portion of the participation if our portion is under 1M or is the total amount of the loan viewed as the governing factor as to whether or not it is CRA reportable? I am not sure. Can someone direct me to where I might this information?

We just filed our CRA data and this came up. You are allowed to report your portion of the participation in the "less than 1 million" category. We had a 50% participation in a $1.2 million loan and we reported our potential total exposure at $600,000.

Steve,
Is there anything out there in the regulations that gives us this direction? I like to document our reason for this approach just in case I need to use it for reference. Its nice to know this is not a unique issue. Thanks for your response.

This loan should NOT be reported as a "small business" loan.

I recently ran into the same situation and asked my regulator the same question and she referred me to FFIEC Communtiy Reinvestment Act Interagency Questions and Answers-question 42(a)(2)-1. She stated that it is the same principal in a participation. You must report the loan amount at origination to determine if it is truely a "small business" loan. Otherwise what stops every bank from participating out every large business loan and having lots and lots of "small business" loans.

[This message has been edited by Jennifer (edited 02-25-2002).]

The FFIEC Q&A dated July 11,2001, says: "Sec.___.42.(a)(2)-1: When an institution purchases a small business or small farm loan, which amount should the institution collect and report -- the original amount of the loan or the amount at purchase?" "A1. When collecting and reporting information on purchased small business and small farm loans, an institution collects and reports the amount of the loan at origination, not at the time of purchase. This is consistent with the Call Report's and TFR's use of the 'original amount of the loan' to determine whether a loan should be reported as a 'loan to a small business' or a 'loan to a small farm' and in which loan category a loan should be reported."