CRA Officer

We have not been a formal CRA reporter in that we haven't had to file a LAR due to our size. We recently passed the $250M threshold, so I'm thinking that there is probably going to be some more reporting involved.

My question revolves around what types of loans are most typically reported on the LAR for CRA? Are they consumer loans or commercial loans, or both? What department does your CRA Officer work in? Just trying to get a feel if our CRA Officer position should be moved to a different department.

The only required information you need to collect is small business and small farm loans. There are options for including additional data if you either a) are a glutton for punishment, or b) believe that you are doing such a good job on other loan types that it is worth doing more work than required!

My recommendation to see what is collected is to download the CRA Data Entry Software from the FFIEC website. Tinker around with it for a bit and you'll see what is required, and what the optional choices are.

Some banks need the consumer data if that type of lending exceeds their small business lending. Everyone is different.

Review the guide to data collection and FAQs at the FFIEC site. Also, pay close attention to the loans that are reported - they tie directly to call report/TFR line items, so check your bank's call report process and become familiar with the call report line items and definitions (such as loans secured by real estate, and "primarily") in the call report glossary.

http://www.ffiec.gov/cra/default.htm

Small business loans are drawn from line items 1e1, 1e2,4 (4a for assets >300 million)
Small farm are drawn from lines 1b and 3.

The call report instructions explain what goes into each of those lines. Your reporting population will be loans in the category originated/renewed/refinanced/modifed in your reporting time period that meet the size requirements (up to and including $1million for small business; up to and including $500,000 for small farm).

MS Kaybee, are examiners now requiring consumer data?

If it is the primary lending of the bank, they will base an exam on consumer. They look at the call report (or TFR) to determine what will be included in the exam.

I have personally had to bring consumer in to demonstrate serving the community when small business was not strong enough but consumer was quite strong.

Banks do not have a CRA collection and reporting requirement until they cross the large bank threshold, which is presently at $1.098B. See regulatory exerpt below:

(u) Small bank—(1) Definition. Small bank means a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.098 billion. Intermediate small bank means a small bank with assets of at least $274 million as of December 31 of both of the prior two calendar years and less than $1.098 billion as of December 31 of either of the prior two calendar years.

Regarding loans to review: if the bank is small or intermediate small, the examiners are required to evaluate performance on the primary loan products, which could very well include consumer lending. Bank may always bring "other loan data" to examiners' attention.

Whether or not the bank must file an annual submission, they will still be examined on the data - reported or not.

What I have found is that banks that feel they do not need to pay attention because they are not in the large bank category do themselves a great disservice and then have to scramble when the regulators ask for data for the exam. The bank does not have data ready, cannot readily determine what is covered, and has no idea of how its performance will be judged. The bank then has to work harder to obtain and present its data than it would have if it had continued to report.

Ignoring CRA because the bank is a small or intermediate small bank is dangerous. The change in the regulation causes smaller banks to place themselves in a precarious situation.

I agree with MS Kaybee. Unfortunately many small banks have taken the non-reporting of CRA data to be tantamount to not having CRA performance responsibilities. I know a few CRA officers who would like to collect and monitor their CRA data but don't have the support of management and therefore don't gather the data. As a result, it is a "Keystone cops" drill before the CRA exam. I can't imagine putting myself in the situation of being responsible for performing under a regulation but not having the data to know whether I am performing or not. Allowing small banks not to report is a disservice to small banks in my opinion.