On our annual submission of our CRA Loan Register, it asks to enter the total number of Community Development loans and the total dollar amount of these loans. What happens if the ones we include turn out later (like at exam time) to not really qualify for one reason or another. Do we get in trouble for having incorrect information then on our submittal?

It would be cited on your exam and they would ask you to resubmit the applicable years CRA statement.

So is it better to just report none and then present what we think we could get credit for at our exam?

If you really are in doubt, contact your regulator and run the loans by them. If you really think you have a good case, then document your file (to the hilt!) and submit the loans.

In the past, if the examiners disagreed with a couple of loans, they did not make us refile the entire submission. Now if ALL of your CD loans really aren't Community Development, then you would probably have to refile.

However, if you don't submit the CD loans on your LR, then I think you would have a very difficult time in getting the examiners to give you credit for it.

The examiner line of thinking goes along the lines of "Well if you weren't sure enough to include it on your LR, then you really weren't trying to make a Community Development loan. We won't give you points for being lucky."

I'm paraphrasing, but that's about the gist of it.

No, it is better to report what you think is reportable (and check when not sure).

The examiners are not your only constituency--the Federal CRA Disclosure becomes a public document. If you do not report CD loans at all, someone or a group might notice and question it. It will be more difficult to explain these technical nuances to a community group or to the press than to an examiner.

Well, here is what I decided to do...I didn't feel 100% comfortable that they were truly a CD loan so I didn't include it with my loan register. However, I did move them from the CD Loans section of my exam folder to the Innovative Lending section to (hopefully) still have them considered in our exam. Thanks for your help - there really isn't one aspect of this whole Reg that isn't tricky is there?!?!

Hey wait a second people. This figure is just a figure, nothing more. You can change the actual amount of CD lending in your exam from the submitted data with no penalty at all!!! I always re-up my CD lending figures after a more complete review of the files. This is NOT a resubmission issue in any way.

This is why I always say the compiliations of bank submitted CD figures are not really of much value when looking at the annual figures. It's always a better idea to check out actual exams to see what the competition is doing. The CD figures on the LR don't tell you anything but a number, which can change based on the examiner's review.

Submit as close as you can come, but remember that this figure is NOT set in stone, and will not result in a resubmission!!! It's not better to report "none" because it would be nice to provide the community with a general idea about the level of CD lending you do. While the data is crap to me in reviewing myself against other banks, it's still a figure that others like to look at, and putting yourself in the zero lending category would not look very good to your public.

Submit what you think qualifies Shannon, and if you have to rule a few out, or add a few at examination, NO BIGGIE!! You can add deals right up until the day of the exam if you wish to, which includes deals that haven't been included in any submitted LR.

Now this is the answer I was originally hoping for! I was talking to our Compliance Officer (who is also our CRA Officer) about this yesterday and since our submission is due March 1st and our examiners won't be here until 10 days later...what if I found some more CD deals during that 10 days?! They weren't on my submission but they still turned up prior to exam...

Still leaving that one under innovative lending practices - because I can't support it as a CD loan fully.

Innovate does not automatically qualify as CD, so that's fair to leave off if you're struggling. You can submit your CD lending right up to the day the examiner says stop which could be at a specific date you predetermine or loans you locate and loans originated right up to that day, which sounds like 10 days from now

A hint...I cut off my CD lending and investments provided to the examiner at the same date as the lending activity is cut off. I do this because I don't have time to review the portfolio right up to the day that the exam happens and if I miss something, I can't use it in the next exam if it falls under the dates I agree to. Typically you're looking at lending data that is something like six months previous as your cut off date for exams. Cutting your CD activities off at the same time gives you time to examin and compile real figures for submission to the examiners, verses the last second scramble you're in now. Most banks do this, and miss out on non reported CD Services, Investments (ie donations) and lending that is happening the same week as the examiners are showing up because the CRA officer is too bogged down digging up performance context for exam. These numbers are wasted efforts, never to be used in an exam.