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#1994446 - 02/09/15 03:53 PM Use of Affiliate Loans
Rocky P Online
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Joined: Jun 2003
Posts: 7,650
Florida
Affiliate reporting Per the Guide
"If an institution elects to have an affiliate’s home mortgage lending considered in its CRA evaluation and the affiliate is a HMDA reporter, the institution must be prepared to identify those loans reported by its affiliate under 12 CFR part 1003 (Regulation C, implementing HMDA). At its option, the institution may either provide examiners with the affiliate’s entire HMDA disclosure statement or just those portions covering the loans in its assessment area(s) that it is electing to have considered. If the affiliate is not required by HMDA to report home mortgage loans, the institution must provide sufficient data concerning the affiliate’s home mortgage loans to enable the examiners to apply the performance tests."

Does this mean that a bank can use the lending of an affiliate for CRA purposes, the bank would not have to purchase the loans from the affiliate, and the loans would be only for CRA, and not for Fair Lending?

Thanks
Rocky
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#2003812 - 03/25/15 11:12 AM Re: Use of Affiliate Loans Rocky P
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
Late in getting back to you and hopefully your reported correctly, yes the bank can report affiliate loans if the affiliate is not also claiming those loans without having to purchase the loans from the affiliate.
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#2004170 - 03/26/15 02:11 AM Re: Use of Affiliate Loans Rocky P
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 2,084
Connecticut
Rocky - the best part is that all affiliate lending outside the AA is not considered in a CRA PE.

In the debate about the role CRA had in the financial meltdown of 2008 defenders of the Regulation noted that much of the loose lending practices that led to the debacle were practiced by non-CRA lenders. But what has not been said is that many non-CRA-regulated lenders were affiliates of CRA regulated institutions and many of the CRA-regulated lenders exercised their elective to include the activity of their non=CRA regulated affiliates in their CRA exams. A couple of years after the meltdown I personally reviewed some of the CRA PE's for the nation's largest institutions and in many, if not most, cases the CRA-regulated lender exercised their elective to include affiliate activity in their CRA PE's. It would be interesting to see a study that took that into consideration, but to the best of my knowledge this has not been considered in the studies done about the meltdown.
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