Guide to CRA Data Collection & Reporting Flashcards
What types of banks are required to report?
All state member banks, state nonmember banks, national banks, and savings associations that meet or exceed the asset size thresholds for both of the last two calendar years are subject to the data collection and reporting requirements of the CRA
Do bank’s that don’t meet the asset size threshold need to submit data?
Can they?
Institutions that do not meet or exceed the asset size threshold have the option of submitting data voluntarily. An institution that submits data voluntarily retains the option of being examined as a large institution.
When must the required CRA data be reported each year?
Data for a given year must be submitted to the Board, the designated processor for all of the agencies, by March 1 of the following year
What are the data collection and reporting requirements for the following scenario?
Two institutions are exempt from CRA collection and reporting requirements because neither met the asset size threshold. The
institutions merge.
No data collection is required for the year in which the merger takes place, regardless of the resulting asset size. Data collection and reporting
would begin after two consecutive years in which the combined institution
would have year-end assets
that meet or exceed the small institution asset size threshold
What are the data collection and reporting requirements for the following scenario?
Institution A, an institution with assets that meet or exceed the asset size threshold, and Institution
B, an institution with assets below the asset size threshold, merge. Institution A is the surviving institution.
For the year of the merger,
data collection is required for Institution A’s transactions. Data collection is optional for the transactions of the previously exempt institution. For the following year, all transactions of the surviving institution must be collected and reported.
What are the data collection and reporting requirements for the following scenario?
Two institutions that are each required to collect and report data merge.
Data collection is required
for the entire year of the merger and for subsequent years, provided the surviving institution is not
exempt. The surviving institution may file either a consolidated submission or separate submissions
for each institution for the year of the merger, but must file a consolidated report for subsequent years.
What are the reporting requirements for a bank that did not originate or purchase small business or small farm loans?
An institution that has not originated or purchased any small business or small farm loans during the reporting period would not submit
the composite loan records for small business or small farm loans. However, all institutions subject to data reporting requirements must submit the information discussed below under “Reporting Requirements.”
- transmittal sheet
- definition of its AA
- record of CD loans
- info on small farm and small business loans if applicable.
What information are applicable institutions required to report for CRA? (4)
At a minimum, an institution must submit, in electronic format:
• a transmittal sheet,
• a definition of its assessment area(s),
• a record of its community development (CD) loans. (If an institution does not have CD loans to report, the record should be sent
with “0” in the CD loan composite data fields), and
• information on small business and small farm loans, if applicable.
True or false:
CRA data is aggregated on the Census Tract level. Each tract represents one record in an entire data submission.
True
For example:
• Six different small business loans made in the same census tract constitute one composite record.
• Six different small farm loans, three in one census tract and three in another, constitute two composite records.
If a bank is not required to collect HMDA data, does it need to collect home mortgage data for CRA?
No, examiners will sample a bank’s home mortgage data in this instance to evaluate the home mortgage lending.
If a bank wants to ensure that examiners consider all of its home mortgage loans, it may collect and maintain data on these loans.
What are Modification, extension and consolidation agreements (MECAs)?
Does a bank need to report these for CRA?
Transactions in which an
institution obtains loans from another institution without actually purchasing or refinancing the loans.
In some states, MECAs, which are not considered loan refinancings because the existing loan obligations are not satisfied and replaced, are common. Although these transactions
are not considered to be purchases or refinancings, as those terms have
been interpreted under CRA, they do achieve the same results. An institution may present information
about its MECA activities to
examiners for consideration under the lending test as “other loan data.”
When reporting CRA data, what information needs to be included on the transmittal sheet? (8)
-Reporter’s ID number (RID) corresponds to the bank’s cert number
- Bank name
- contact name
- address
- phone number
- fax number
- email address
- record count of the total number of line entries on the submission
When reporting CRA data, what information needs to be included regarding the bank’s AA?
List for each assessment area showing the geographies within the area. The assessment area may be reported by census tract; however, it is permitted to report the assessment area property location information at a summary level.
The combinations reported in these examples represent MSA or MD/State/County/Census Tract combinations. The examples are not meant to be exhaustive.
• 47894/NA/NA/NA—The assessment area encompasses all census tracts in MSA/MD 47894.
• NA/56/013/NA—The assessment area encompasses all census tracts in state 56 AND county 013 that are outside of an MSA/MD.
Generally what must a bank collect regarding community development activities?
- Number and dollar amount of loans, investments, and services
- the CD purpose for each
- Location of the CD activity (in AA or in area the benefits broader statewide or regional area)
What are the four community development purposes?
- Affordable housing
- Community Services
- Economic development
- Revitalization and Stabilization
What are the requirements for a CD activity to meet the affordable housing purpose?
Must provide affordable housing (including multifamily housing) to low- moderate- income individuals.
What are the requirements for a CD activity to meet the community services purpose?
Must offer community services that primarily target LMI persons.
What are the requirements for a CD activity to meet the economic development purpose?
Must promote economic development by financing businesses or small farms that meet the SBA size standards or have GARs of $1MM or less.
(size and purpose test)
What are the requirements for a CD activity to meet the Revitalization and Stabilization purpose?
Activities that revitalize or stabilize i. Low- or moderate-income geographies; ii. Designated disaster areas; iii. Distressed or underserved nonmetropolitan middle income geographies
Is a bank required to collect and report information on affiliate lending?
An institution is not required to collect information on affiliate loans. However, an institution that elects to have its regulator consider loans by an affiliate, for purposes of the lending or community development test or an approved strategic plan,
must collect, maintain, and report for those loans the data that the institution would have collected, maintained, and reported had the loans been originated or purchased
by the institution.
What are the reporting requirements for bank’s and affiliates if they are purchasing and selling loans to each other?
No affiliate may claim a loan
origination or loan purchase if another institution claims the same loan origination or purchase.
However, an institution can count as a purchase a loan originated by an affiliate that the institution subsequently purchases, or count as an origination a loan later sold to an affiliate, provided the same loans are not sold several times to inflate their value for CRA purposes.
For banks subject to CRA data collection and reporting, what data do they need to collect and maintain for each small farm and small business loan? (4)
- a unique number or alphanumeric symbol that can be used to identify the relevant loan file;
- the loan amount at origination;
- the loan location; and
- an indicator of whether the loan was to a business or farm with gross annual revenues of $1 million or less
What types of commercial loans are applicable bank’s required to collect and report for CRA?
Only those commercial loans included as “Loans to small businesses” as defined under the RC-C of the call report.
What is the definition of a small business loan for the purpose of collecting and reporting CRA data?
same at the definition under the call report instructions
Small business loans are defined as those whose original amounts are $1 million or less and that were
reported on the institution’s Call Report as either “Loans secured by nonfarm or nonresidential real estate” or “Commercial and industrial
loans.”
What is the definition of a small farm loan for the purpose of collecting and reporting CRA data?
same as the definition under the call report instructions
Small farm loans are defined as those whose original amounts are $500,000 or less and were reported as either “Loans to finance agricultural production and
other loans to farmers” or “Loans secured by farmland.”
true or false:
It is the original amount of a
loan, not the annual revenue of a business or farm, that determines the classification of a loan as a small business or small farm loan.
True
What supplemental information should be maintained for small business and small farm loans?
- census tract of the loan
- date of origination or purchase
- whether originated or purchased by an affiliate
How should SBL be reported if they are secured by non farm residential real estate?
They must be reported as “loans secured by real estate” when the RE collateral taken is greater than 50% of the principal amount of the loan at origination unless the collateral is taken as an abundance of caution.
If the value of the RE is 50% or less of the loan amount, the loan should be reported in another category based on the purpose of the loan (ex: commercial and industrial)
If the loans promote community development they can be considered as CD loans.
Otherwise, the bank may opt to collect and maintain data separately as “other secured loans/lines for purposes of small business”
What are the aggregate SBL and Small farm reporting requirements for bank’s subject to CRA reporting?
An institution subject to data reporting requirements must report the aggregate number and amount of loans for each geography in
which it originated or purchased a small business or small farm loan. Loans to businesses and farms are
reported by origination amounts of:
- $100,000 or less;
- more than $100,000 but less than or equal to $250,000; and
- more than $250,000.
Institutions must also report loans to businesses and farms with gross annual revenues of $1 million or
less, using the revenues that the institution considered in making its credit decisions.
When collecting and reporting information on purchased small business and small farm loans, does the bank report the origination amount or the purchase amount?
What amount should be used when assessing the volume of SBL and SFL under the lending test?
A bank collects and reports the amount of the loan at origination NOT at the time of purchase.
this is because the origination amount is used to determine if a loan is a SBL or SFL according to call report.
Under the lending test, the examiner’s will evaluate the bank’s activity based on the amounts at purchase.
When collecting and reporting information on purchased CD loans, what amount should the bank use?
A bank collects and reports the amount of the loan that was purchased.
Same for participations, only the amount of the participation purchase.
HOWEVER, the bank uses the amount at origination to determine if the loan meets the definition of a SBL, SFL, or CD loan.
What amount should be reported in the following example?
A bank purchases a $400,000 participation in a business credit that has a CD purpose, and origination amount of the credit by the lead lender is over $1MM.
The bank would report the $400,000 as a CD loan.
How should a bank collect information about SBLs and SFLs that it refinances or renews?
The information should be collected as if it was an origination.
However, a bank may only report one origination per loan, per year, unless an increase in the loan amount is granted.
If a bank increases the amount of a small business or small farm loan when it extends the term of the loan, how should the loan be reported?
The bank should report the amount of the increase as a small business or small farm loan origination.
It should only be the amount of the increase if the bank has already reported the original or remaining amount of the loan once that year.
How should the following loan be reported?
A financial institution
makes a term loan for $25,000; principal payments have resulted
in a present outstanding balance of $15,000. In the next year, the customer requests an additional
$5,000, which is approved, and a new note is written for $20,000.
In this example, the institution should report both the $5,000 increase and the renewal or refinancing of the $15,000 as originations for that year.
However, the institution may report the $5,000 increase together with the renewal or refinancing of the $15,000 as a single origination of $20,000.
True or false:
A demand loan that is reviewed on an annual basis should be reported as a renewal because the term of the loan has been extended.
False:
This should not be reported as a renewal because the term of the loan has NOT been extended.
Should community development loans that are renewed or refinanced be reported as originations?
Yes, but Community development loan refinancings and renewals are subject to the reporting limitations that apply to refinancings and renewals of small business and small farm loans.
