I saw a prior post stating that any modification for an extension of terms would be reported as a refinance/renewal on the CRA LR. However, I currently have one under review that REDUCES the loan amount and SHORTENS the maturity date. A new borrower is being added as a co-borrower. While the loan shows as paid and reopened under a new loan number in our system of record, the modification agreement itself states that the modification is NOT an extinguishment of the debt in the original Note and the terms of the original Note (except the specific terms modified) would continue to be valid. Does anyone have any guidance that would be relevant to this particular situation?

While your example is not a demand loan, same concept applies. Since you are not extending the term of the loan, you do not report it.

From the CRA guide:
Note: A demand loan that is reviewed on an annual basis should not be reported as a renewal because the term of the loan has
not been extended.

SECTION __.42(a) – 5: Should institutions collect and report data about small business and small farm loans that are refinanced or renewed?
A5. An institution should collect information about small business and small farm loans that it refinances or renews as loan originations. (A refinancing generally occurs when the existing loan obligation or note is satisfied and a new note is written, while a renewal refers to an extension of the term of a loan. However, for purposes of small business and small farm CRA data collection and reporting, it is not necessary to distinguish between the two.)

Thank you for the response. I was more looking at it as a potential refinance than a renewal. My conundrum is the difference between the information in our system of record stating the debt was satisfied and reopened under a new loan number, and the modification agreement stating much of the old note survives. At what point does a modification become a new origination? I used to work in the mortgage industry and I know several years ago there was a push to get Loss Mitigation specialists licensed as loan originators because the loan modifications they were processing were being considered "originations" by regulators. It appeared to me that the change in loan amount, due date, and borrowers would pass that threshold, but there is nothing clear regarding that point in the guidance that I can find.

I'll let the gurus correct me if I'm wrong but based on the Q&A I quoted above, a refinancing "generally occurs when the existing loan obligation or note is satisfied and a new note is written."

You mentioned that the modification agreement states the modification is not an extinguishment of the debt. Based on that information, you don't have a true refinancing. A new note would not make reference to a prior note. Also, although CRA doesn't state "satisfied and replaced" for a refinancing like other regulations do, I think we can apply the same concept.