This looks to be another great compliance site. Thanks for providing it Mary Beth! We are struggling with a system issue and need some clarification about CRA. In the new CRA Q&A questions 42(a)-5, there is an example which we have interpreted to sya when you have a renewal or refinance with an increase you record the outstanding balance on the date of the renewal/refinance and not theloan balance which includes the increase amount. Our question has to do wiht the reference in question .42(a)-4 where you treat lines of credit in the same manner as loans. DO you take this to mean when you have a renewal or refinance with an increase on a line that you record the outstanding balance on the date of the renewal/refinance and not the full amount of the credit line as we do for original originations?

It looks to me like they don't specifically address renewals or refinancings on lines of credit except in 42-4 where they say you don't report renewals of lines of credit for data collected in 2000, but you do in 2001, to the same extent you report renewals of small business loans. The guidance in 42(a)-5 that tells you how to handle refinancings and renewals of loans (and it is different for data collected in 2000 than for subsequent years) and you have separate guidance in 42-3 for lines of credit. 42-3 says that an increase on a line of credit is considered a new origination and the amount of the increase is the amount that is considered originated and that amount should be reported. Where you are actually refinancing a line of credit, however, and the refinancing entails an increase, I'm apt to think that you should treat it as an origination (since the original obligation is legally being extinguished and will be replaced by a new obligation) and you should report the entire amount.

For those of you who want to take a look at the Q&A and weigh in with your thoughts, go to the CRA links on the Compliance Launch Pad.

[This message has been edited by Mary Beth Guard (edited 11-03-2000).]