Our Regulator, FRB, said that the refinance of a home improvement loan can be reported, regardless of the collateral. We have always said it had to be secured by residential RE. Any thoughts? He referenced the 'Getting it Right' book. One more thing -- he checked with the Board of Govenors before telling us this, just to make sure.

A Guide to HMDA Reporting Getting It Right
"Unsecured Home Improvement Loans - Refincings of unsecured home improvement loans may also be reported (as refinancings), if you choose to base your reporting on available documentation or the statement of the borrower about the purpose of the existing loan."

yes we asked the FRB and they said the same thing. It depends however how you make your decision. In our case, we rely on the statement of the applicant or documents that the existing obligation was a home-improvement loan Sec. 203.1 4.i;so we would have to report refinance of a home-improvement, unsecured . If we had used ii or iii, we would have had to assume the existing loan was secured.

Federal Reserve System
12 CFR Part 203
[Regulation C; Docket No. R-0839]
Home Mortgage Disclosure
Agency; Board of Governors of the Federal Reserve System
Action: Final Rule
Dates: Effective date: January 1, 1995

Code 3: Refinancings
Many commenters noted that to ensue that the collection of data under HMDA is related to the housing credit needs of communities (as specified in the Act), reportable refinancings should be limited to those secured by a dwelling. In keeping with the revisions to paragraph c. Code 3, the Board has revised paragraph a. under Code 3 to state that only refinancings of loans secured by a lien on residential dwellings are to be reported. Therefore, refinancings of unsecured home improvement loans will no longer be reported under HMDA.

Page 25 of GIR......Finally, you may choose to report the transaction only if the new loan will be secured by a lien on a dwelling.

Based on the above, we do not report the unsecured refinancig of an unsecured home improvement loan. However, if the loan is being refinanced with new money that is designated for home improvement, we report it as a home improvement loan.

The FDIC and HMDA Help line agree with us.

What about home improvement loans secured by a vehicle? I said it shouldn't be on HMDA, but haven't had time to look into it further.

With home improvement, the key is how you classify it, not what the collateral is. If you classify the HI loan secured by a vehicle on your books as a Home Improvement loan, it should be reported on HMDA regardless of the collateral. You would report the location of the home being improved.