CRA Reporting of Gross Revenue (Reg BB)

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Question:

The CRA regulation states, "generally, an institution is to rely on the revenues that it considered in making its credit decision." It also states, "The regulation does not require institutions to request or consider revenue information when making a loan; however, if institutions do gather this information from their borrowers, the agencies expect them to collect and rely upon the borrowers' gross revenue for purposes of CRA." Does one of these trump the other? We use personal income for the credit decision and rarely use gross revenues of the business. Our auditors think the "credit decision" amounts outweigh using what we have in the file. If we only used the credit decision amounts, we wouldn't have many loans to report.

Answer:

It says you don't have to collect the income data, but if you do, report what was considered. Based on the question the bank uses personal income. That would be reported.

You also indicate the bank will "rarely use gross revenues of the business..." This is questionable if there is not a well defined guide for when the business income is used. This could be an ECOA issue as part-time income as one example can't be excluded just because it is part-time income. This can be discriminatory.

Back to the question, if you collect it, report it. And you report that on which the decision is based.