We purchase loans from car dealerships. We report those loans for CRA. My question is, are we responsible for the accuracy of the information reported? Our data integrity team says they don't review the accuracy of the reported data as the Bank is not responsible because they are not the original lender. Our audit team has found discrepancies in the reported income. Would the bank be at risk of resubmission for this inaccurate data during a data review exam? Thank you

Well, I have seen total chaos on reports of purchased loans that triggered resubmission. The bank is responsible for reporting accurate data. Find out what the proper field to carry over is and stick with it. Come up with a procedure and follow it closely to remove any question.

Are these business loans (and therefore submitted?) If consumer loans they are not submitted but presented in an exam.

They are both business and consumer loans as we buy paper from all types of dealerships. We do report consumer loans and submit them annually along with other CRA data.

The only loans submitted in the annual CRA submission are small business and small farm, and then the aggregate community development data (total # of loans and total $ of loans.)

You may have the consumer data in your software, but it is unlikely that it is including it in the submission.

You are correct, I meant submitted in aggregate but then available for loan level review during the data review portion of an exam.

Not that it matters for the answer to your question, do you mean you are submitting loans purchased from dealers as community development?

That would be unusual.

You might have consumer loans loaded into the FFIEC software or into your vendor software, but they will never be submitted in the annual submission. They will simply be held there and you can present them in an exam if you wish to use them to further show how the bank serves its assessment areas.

Sorry for the confusion, no we are not submitting them as community development loans. The Bank maintains data for consumer loans originated or purchased for consideration under the lending test. During the data review exam the data is available for examiner review at the loan level; i.e., the loan number, loan amount, loan location and income/revenue just like any other CRA loan that is required to be reported. My concern is that the examiners will review this loan data and determine if we have supporting documentation for the amounts such as loan amount or income. Internal Audit has found some discrepancies in the income amounts being housed in the software compared to documents in the file. The software data is how we provide the information to the examiners during a data review so will that be a cause for examiner scrutiny the same as if they are reviewing supporting documentation for HMDA or CRA data submission for loans that are required to be submitted? Or do the examiners bypass any data review of loans that are not required to be reported and only review small business and small farm data?

If the information is unavailable when a loan is purchased you can enter NA for income. You have the data.

It is hard to advise what to do when I do not know where you are getting the data from that the auditors are citing for errors. Can you pinpoint a consistent file document that the prior bank was using for income? Perhaps some testing will show a trend in identifying the source of the data in the software.

If you cannot identify where the amount reported for income came from so that you know the correct amount is being reported, I would be inclined to say it is not available and report NA.

The loans are purchased loans from car dealerships, not another bank. We have a software system that allows the dealer to enter in information such as loan amount, income, etc.. Then we receive the loan file to include the application, promissory note, etc. from the dealership. The income number entered by the dealership into the software does not match the income documented on the application, etc. Our data integrity team is not making sure that the income documented on the application, etc. matches the income entered into the software. I am not saying they need to verify the income, just make sure the data file matches the actual documents. The data file will be provided to examiners and also the actual documents so if they don't match, will that be an exam finding even though these loans are not required to be reported? Or, do examiners just skip the review of these consumer loans for data accuracy because they are not required to be reported? We would not report the income as NA because we do have an application or some other document that has income listed. Thanks again!

It doesn't matter who the loans are purchased from (I said bank out of habit).

As I mentioned, I have seen banks have to resubmit due to data integrity on purchased loans. You need to develop a procedure, determine what number is the right number and always use that number.

Thank you, I appreciate your help on this.