We have the FDIC on site right now. The examiner that is doing CRA is telling me that when we have a mixed purpose loan (business and consumer) that we are to only report the amount associated with the business purpose in our small business loan data. For example, if we made an unsecured loan to an attorney for $250,000 and the credit memo indicates $225,000 was to be used for business purposes and $25,000 was to be used for personal use we are only to report $225,000 in our loan data.

I explained to her that the call report instructions for 4a loans do not required a bank to do this. She told me late yesterday that there is a Q & A that covers this. I asked her to show it to me, but this happened late yesterday and she left for the day.

I have never heard this and I can't find a Q & A that states this. Is she correct?

I think the examiner might be thinking of the Q&As regarding community development loans and affordable housing. There are Q&As that discuss how to report loans where a portion of the units are for affordable housing and others are not. But this is the only thing I can find. The loans she identified as examples were not community development loans. She specifically stated that this applied to small business loans.

I think my examiner is a little confused.... Sad thing is that she made these comments to our entire senior management team and the EIC went along with it.

From the interagency Q and A (which conforms with the call report). I would request a conference call to discuss. They are wrong.

§ll.12(j)—3: How should an institution collect or report information on loans the proceeds of which will be used for multiple purposes?

A3. If an institution makes a single loan or provides a line of credit to a customer to be used for both consumer and small business purposes, consistent with the Call Report and TFR instructions, the institution should determine the major (predominant) component of the loan or the credit line and collect or report the entire loan or credit line in accordance with the regulation’s specifications for that loan
type.

Kathleen,

You are awesome! This is JUST what I need!

Thank you!

Link for FDIC

http://www2.fdic.gov/crapes/

FRB link: look for pdf link once you do your search to access individual reports.

http://www.federalreserve.gov/apps/crape/BankRating.aspx