CRA and business loan extensions

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Question:

A small business loan was originated last year for 12 months and the maturity was extended this year for another 12 months by modifying the note with a new maturity date. Is this modification included in our small business loan data?

Answer:

For CRA purposes, both refinances and renewals are reported; refinances are transactions where a new loan obligation (a note) satisfies and replaces the prior obligation, while a renewal refers to the extension of the maturity date of the loan. Both are considered (and reported if a CRA reporter) for CRA purposes. A modification that extends the term of a loan would thus be a reportable transaction for CRA. This methodology differs from HMDA. The CRA Q & A provides guidance on this topic.

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