Hello all...

My bank has just recently decided to stop reporting HELOCs on their HMDA LAR

Now, I'm wondering what to do with those LOCs that involve SFR rental property. (Mom and Dad buy a SFR for rental investment.) Can these be reported on the Small Business LAR as a type 09?

Thanks!

Technically you don't "report" any CRA loan types except type 1 and 2. The other loan types that you can maintain in the micro data are collected and monitored by you, but not reported. It is useful to collect and monitor such data because it can be included in your CRA PE if you exercise your elective under the regulation. But you can't intelligently exercise that option if you don't collect and monitor the data so you can determine how it affects your performance. You can include the unreported HELOCS in code 9 or code 4 as long as you are consistent about it. There is no regulatory reporting issue in this case.

Ok, so let me rephrase what you just said in English...LOL.

We can report "Mom and Pop" purchases of rental property as code 9 if we choose to collect and monitor the entries for CRA PEs.....right?

You are requireed to Report CRA loan types 1 (Sm Bus) and 2 (Sm Farm)

It is the banks option to report all other CRA loan type codes 3 to 9 for annual submission. Home Equity loans are CRA loan type code 4. CRA Loan type code 9 is Other Loan Data

If you are an ISB or Small Bank you are not reporting data anyway. So this will only apply if you are a Large bank and are submitting your data annually.

Sorry, I didn't give enough info. We are a large bank and we do record 3 to 9 for CRA PE.

I'm really asking this question because my manager doesn't think this type of scenario fits the true meaning of "small business".

IOW, this isn't our institution loaning money to a company.
We are loaning to individuals.

I would think it would be a 3, small business secured by residential RE. Even if the loan is to individuals, it has a business purpose.

At the CRA Conference sponsored by the SF FRB earlier this year regulatory spokespersons for the FDIC and the OCC stated that the agencies will allow any non-reported loans to be grouped in any of the non-reported categories as long as the grouping is consistently followed by the bank. They even said that you don't have to put home equity loans into loan type 4. They said if you do this and you want those loans to be included in your CRA PE you must notify the EIC and explain how the loans are grouped and express your desire to have the loans included in the PE. So the regulators allow quite a bit of flexibility with respect to the non-reported loan types as long as the data is easy to identify and compiled in a consistent manner that facilitates analysis. The important thing is the integrity of the data. Any reliable data that helps demonstrate how your bank is meeting the need for credit services in your assessment area can be considered in a CRA PE.

Great answers....thanks to both of you!