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Commercial Loan - HMDA or Not?

Question: 
I am currently reviewing our Commercial HMDA data for 2021 and came across a unique situation and was wondering if you could provide some clarification on a loan if it should be HMDA reportable or not. The loan is a straight line of credit for business purposes. Would this automatically be reportable or under what conditions would it be?
Answer: 

Randy Carey:

Official Interpretation
Paragraph 3(c)(10)
1. General. Section 1003.3(c)(10) provides a special rule for reporting a closed-end mortgage loan or an open-end line of credit that is or will be made primarily for a business or commercial purpose. If an institution determines that a closed-end mortgage loan or an open-end line of credit primarily is for a business or commercial purpose, then the loan or line of credit is a covered loan only if it is a home improvement loan under § 1003.2(i), a home purchase loan under § 1003.2(j), or a refinancing under § 1003.2(p) and no other exclusion applies. Section 1003.3(c)(10) does not categorically exclude all business- or commercial-purpose loans and lines of credit from coverage.

Answer: 

John Burnett:

To know whether it gets reported, you will have to know the purpose of the line of credit. If it fits one or more of the three categories included in the paragraph that Randy cited, report it.

First published on 02/27/2022

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