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Reporting a Mortgage-Secured Letter of Credit

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Question: 
We are writing a letter of credit for a bank customer, who will use it for business purposes. The L/C is secured by a 2nd lien on the customer's residence. Are L/Cs CRA reportable, or should this L/C be included in our HMDA LAR? It is unlikely that the customer will ever draw against the L/C, but should we report the total credit available as the amount 'originated'?
Answer: 

Click here, then click on Edit in the tool bar, click Find and enter Letters of Credit and you will find a couple of Q & As. It appears these may be considered under the lending test for CRA. From your brief description the loan does not meet any of the HMDA reporting requirements, i.e. dwelling purchase, dwelling refinance or home improvement.

First published on BankersOnline.com 1/16/06

First published on 01/16/2006

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