My bank will most likely hit the threshold to report in the next year so I am taking this time to get our process for reporting in place and tested.

My question is, are all loans reported on the Schedule RC-C Part II of the Call Report to be reported for CRA? What about those loans that may be secured by commercial real estate or farm land that are truly consumer purpose?

My next question is, what about loans that may not be on the Schedul RC-C Part II, but are for commercial purposes and are not secured by residential real estate (land development loans for example)?

Thanks in advance!

Small business loans are those for the period being reported that fall into lines 1e1, 1e2 and 4 or 4a.

I have a loan to an individual that is secured by nonfarm/nonresidential real estate so it is properly coded as 1e1; however, the purpose is to refinance mortgages on his primary and secondary homes. While it is technically in the proper bucket to report as a small business loan, that's not really what the proceeds are being used for. Is this still CRA reportable?

Sano - That is in essence what I was asking. We have some loans that I believe are coded correctly for the call report, but I don't feel need to be CRA reportable. Some are similar to your situation. Anyone else have an opinion as to whether these types of loans should be reported?

Yes because the small business definition pulls from specific lines of the call report. 1e1 and 1e2 are collateral not purpose driven. It is an unusual situation and should not skew performance results.

For purposes of this schedule, "loans to small businesses" consist of the following:
(1) Loans with original amounts of $1 million or less that have been reported as “Loans secured by nonfarm nonresidential properties” (in domestic offices) in Schedule RC-C, part I, items 1.e.(1) and 1.e.(2), column B, and
(2) Loans with original amounts of $1 million or less that have been reported in Schedule RC-C, part I:
 On the FFIEC 041 for banks with less than $300 million in total assets, item 4, column B, "Commercial and industrial loans;"
 On the FFIEC 041 for banks with $300 million or more in total assets, item 4.a, "Commercial and industrial loans to U.S. addressees;" and
 On the FFIEC 031, item 4.a, column B, "Commercial and industrial loans to U.S. addressees” in domestic offices.

Kathleen is correct. It might not make sense in all cases, but CRA reporting is Call Report-driven. If you report it one way on the Call Report, it dictates how you report it under the CRA.