Consumer Compliance Outlook 2Q 2011 – CRA – If the loan is to a start-up business but no actual revenue information has been provided, should revenue be recorded as “1”?

Compliance > Regulation BB - CRA
Q:  If the loan is to a start-up business but no actual revenue information has been provided, should revenue be recorded as “1”?
 
A:     Q&A ___.42(a)(4)-3 (page 11670 of the Federal Register notice ) clearly states that institutions should use the actual gross annual revenue to date (including $0 if the new business has had no revenue to date). Although a start-up business will provide the institution with pro forma projected revenue figures, these figures may not accurately reflect actual gross annual revenue and therefore should not be used.
 
 
 
ADDITIONAL INFORMATION:
This information was obtained from the Federal Reserve’s Consumer Compliance Outlook website and related materials from the November 2010 webinar on “Tips for Reporting Accurate HMDA and CRA Data,” which may be accessed here:  https://consumercomplianceoutlook.org/2011/second-quarter/hmda-and-cra-data-reporting/
Users are advised that references to CRA Interagency Q&As may have been updated since that webinar.
 

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