I am wondering how do we handle the situation where a LOC secured by Farm Land has Fed Code of 004A? Do we report it as Small business Loan or Small Farm Loan? (The loan amount is less than $500K.)

Please kindly shed some lights

It is coded incorrectly. Loans primarily secured by farm land belong in 1b.

Kathleen, Thank you very much.
I do beleive this is coded incorrectly. However, without correcting the code, will regulator raise more questions if we report such loan as Small Farm Loan?(since the call report will not show this loan in 01b)

The call report should be fixed. You need to report it as small farm, regardless.

Understood. Thank you veyr much.

What would be the correct call code if the loan is secured be farmland for ag purpose but the loan to value is less than 50%?

Code 3: Loans to finance agricultural production and other loans to farmers

What about a business-purpose credit card issued to an Ag operation? The only references I can find to non-consumer purpose credit cards in the Call Report Instructions or CRA Reporting Guide make reference to them belonging in 4a but I can't find any explicit reference to ag-purpose credit cards. It seems logical they'd be split out just like regular loans are, but I know that's not always the right test to apply

I found the exclusion wording from Call Report Instruction regarding to the Fed. Code 0003.
"Loans to farmers for commercial and industrial purpose, e.g., when a farmer is operating a business enterprise as well as a farm (report in Schedule RC-C, Part I, item 4)"

If the bank makes Line of Credit to a company that is a grower of fresh vegetable, does it mean this loan should be coded as 004A, instead of 0003? please kindly advise.

If the line of credit is for the growing business, it is a farm loan.

If it is for some other business they run (like fixing equipment, or repairing cars), that would be 004A unless of course secured by non farm non residential real estate.

I got a new question~
Unsecured RLOC made to individual borrower who is real estate investor (developer)as working capital for his/her real estate investment.

My colleague and I are having disagreement. We are torn between 004A and 009B. (I think it is 009B since I don't think R/E investor is qualified for professional purpose)

Can you shed some light on this matter. Thanks.

I don't see why it can't be 4A.

Loans to construction companies are allowed as long as not secured by real estate, as well as loans made to finance construction that do not meet the definition of a “loan secured by real estate.”

Even if the borrower is an individual?

I see no differentiation. Have you found a citation in the rules that says unless the borrower is an individual? I have not heard of one. The loan is business purpose, not secured by real estate.

Not in the section of 004A.
But I did found an exclusion description under 006D.

(2) Loans to individuals that do not meet the definition of a "loan secured by real estate" for the purpose of investing in real estate when the real estate in not to be used as a residence or vacation home by the borrower or by members of the borrower's family (report as all other loans in Schedule RC-C, part I, item 9.b.)

Under 004A, it includes Loans for commerical, industrial, and professional purpose to practitioners of law, medicine, and public accounting. It never mentions about R/E investor or developer.

Let me know your thought again~Thanks

4a says also:

Commercial and industrial loans may take the form of direct or purchased loans. Include loans to individuals for commercial, industrial, and professional purposes but not for investment or personal expenditure purposes.

Totally agree with your findings~

This is exactly where I found loan to individual R/E investor a bit tricky. Most of the loan to R/E investors, the U/W is based on personal cash flow and business address is usually his/her residence. For one, I'm having difficutly to determine GAR.

Moreover, Real Estate Investors can be anyone who has a R/E profolio. A dentist, a housewife or a CEO of a company can also be R/E investor. As a result, the business purpose is not as obvious since there is a possibility to be a personal investment.

This is why I try to figure out the logic on how to differentiate the personal investment and business investment.