Interagency Q&A .42(a)(2) – 1: When an institution purchases a small business or small farm loan, in whole or in part, which amount should the institution collect and report – the original amount of the loan or the amount at purchase?

Compliance > Regulation BB - CRA
Q:  § __.42(a)(2) – 1: When an institution purchases a small business or small farm loan, in whole or in part, which amount should the institution collect and report – the original amount of the loan or the amount at purchase?
 
A:  When collecting and reporting information on purchased small business and small farm loans, including loan participations, an institution collects and reports the amount of the loan at origination, not at the time of purchase.  This is consistent with the Call Report’s use of the “original amount of the loan” to determine whether a loan should be reported as a “loan to a small business” or a “loan to a small farm” and in which loan size category a loan should be reported.  When assessing the volume of small business and small farm loan purchases for purposes of evaluating lending test performance under CRA, however, examiners will evaluate an institution’s activity based on the amounts at purchase.
 
 
 
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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