We are wanting to implement the following loan fees:
Real Estate Loans - $150
All Other (including commercial) loans - $50

We are not sure if we are going to call it a "loan origination" or a "loan doc" fee and I know the finance charge rules, but I am having an issue with the treatment of the fee and whether or not it needs to be deferred over the life of the loan or if we can include the entire fee in our income statement. We are currently on a cash system in which we manually convert to accrual for the call report. (We are coverting to an accrual system beginning Jan 1st however).
The only fee we currently have is a 1% origination fee for our Construction Only loans and that is included in income and not netted out.

I have spoken with another bank about how they treat their loan origination fee and they said they claim it as income and they do not defer it and have never been in trouble or even questioned.

There has to be something I am missing in FASB that will exclude us from having to defer the fee. It isn't a percentage of the loan amount which is what the examples use and chances are, it is less than the actual direct costs of the loan.

Any help is appreciated. Thanks

Given the amount of the fees shown in your message, I would consider these to be loan doc fees (and disclose as such) and not defer them.

I agree, but I need something in "Black and White" before I can get the support from management. Thoughts?

RLCarey -

Unless I am still missing something, the link you provided tells me (and mgmt) that the fee would need to be accrued over the Life of the loan which is what we are trying to avoid.

I have read completely through 310-20---- (all inclusive) and can't find anything that will support not accruing the fees we want to charge over the life of the loan.

I am positive I am not reading something right, but I am not an accountant either - Thanks for your help.

I would suggest that you involve your external accountants. I am not aware of how you can take loan fees directly into income either, but it has been a while since I dissected FASB 91.