We are collecting data on consumer loans for internal analysis and possible consideration in our upcoming CRA exam. In performing our data integrity audit, the question arose about the consumer types. Are these types more purpose or collateral driven?

I assumed they were collateral driven more like the Call Report. So, let's say I have a consumer loan to pay income taxes that is secured by a vehicle. I would code that a "5" which is motor vehicle. The genteleman helping me assumed it was purpose driven and that this transaction would be coded a "7" as other secured consumer. I couldn't find any help in the CRA Data Collection book as it only talked about "categories".

Does anybody know for sure? We are new to this and in the middle of a large file review. Thanks for any guidance.

Consumer loans are both purpose and collateral driven. You need to go to Reg BB (CRA), to section 228.12 "Definitions" and then to "(k) Consumer loans". For example, a "motor vehicle loan" is defined as a consumer loan extended for the purchase of and secured by a vehicle.

CRA LR's are produced using the same definations as the call report. The call report is not necessarily "collateral" driven. The CRA LR is definately not driven by one overwhelming factor (ie purpose). Both reports are driven by three issues. Collateral, Purpose AND Borrower. It is the preponderance of these three issues that determines correct reporting for both reports.

You could easily have a loan secured by a commercial building that was taken out by the consumer owner of the building to pay his personal taxes. This loan would not be reported as a loan secured by commercial real estate but instead would fall under consumer reporting on the LR and the Call Report.

This information can be found in detail in the call report guidelines RC-C 1 and on.