Answer:
I'm not aware of a regulatory requirement. Section 103.33(a) of the Treasury Department’s financial record keeping regulation requires banks to record the purpose of loans over $10,000 not secured by real estate. However, HE loans or HELOCs are exempt since they are secured by real estate (or at least most are). I think it is only prudent and a BSA consideration to always have a specific purpose for all loans. I believe examiners could criticize you under due-diligence requirements for loans that are technically exempt from this statute if you didn't know the purpose, so the technical answer is "no," but the prudent answer is "yes."
First published on BankersOnline.com 12/10/07
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