Answer:
Yes. An institution should conduct a data integrity review at least annually for CRA reportable loans
The validation process must match your CRA LR to the actual physical loan files. It is important to remember that testing the CRA data collection process must include every line of business, all systems for data collection and a review of all CRA micro fields in addition to the verification and validation of the Call Report/TFR reporting logic.
Fields with the highest risk should be audited. Auditable fields include unique loan number, note date, original loan amount, open date CRA Type Code, revenue code and geocode. Additionally, you would want to include general ledger (Call/TFR Reporting Codes) collateral and purpose codes as CRA reportable status is derived from these fields. Finally, you should validate the methodology for selecting the gross annual revenue code and ensure that it is consistent with the institution's internal policies/procedures. You might want to consider a 100% review for 60 days to identify the fields that have the highest rate of errors. Any field with an error rate greater than 2% should be part of all on-going audits.
Additionally, it is not enough to test your process, it's important that you take corrective action as necessary. If you discover errors on the Loan Register, they MUST be corrected as soon as possible. If errors occur due to deficiencies in policies and/or procedures, ensure that the appropriate changes are made. If errors occur due to limitations or errors in automated systems, modify the system immediately. And finally, don't forget to retrain your staff and re-test the information.
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