Interagency Q&A .42(a) – 10: How should an institution collect &report the location of a loan made to a small business or farm if the borrower provides an address that consists of a post office box number or a rural route and box number?

Compliance > Regulation BB - CRA
Q:  § __.42(a) – 10: How should an institution collect and report the location of a loan made to a small business or farm if the borrower provides an address that consists of a post office box number or a rural route and box number?
 
A:  Prudent banking practices and Bank Secrecy Act regulations dictate that institutions know the location of their customers and loan collateral.  Further, Bank Secrecy Act regulations specifically state that a post office box is not an acceptable address.  Therefore, institutions typically will know the actual location of their borrowers or loan collateral beyond an address consisting only of a post office box.
 
Many borrowers have street addresses in addition to rural route and box numbers.  Institutions should ask their borrowers to provide the street address of the main business facility or farm or the location where the loan proceeds otherwise will be applied.  Moreover, in many cases in which the borrower’s address consists only of a rural route number, the institution knows the location (i.e., the census tract) of the borrower or loan collateral.  Once the institution has this information available, it should assign the census tract to that location (geocode) and report that information as required under the regulation.
 
However, if an institution cannot determine a rural borrower’s street address, and does not know the census tract, the institution should report the borrower’s state, county, MSA or metropolitan division, if applicable, and “NA,” for “not available,” in lieu of a census tract code.
 
 
 
This Interagency Q&A, and others, was released in July 2016.  The 2016 Q&As consolidates and supersedes all previously published “Interagency Questions and Answers Regarding Community Reinvestment,” and were noted as being effective immediately.  They may be found here:  http://www.ffiec.gov/cra/qnadoc.htm
 

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