NATIONAL
EXCHANGE BANK & TRUST
April 19, 2004
Public Information Room
Office of the Comptroller of the Currency
250 E Street, SW
Mailstop 1-5
Washington DC 20219
RE: Docket #04-05
Dear Sir/Madam:
We appreciate the opportunity to comment on the regulatory proposal
referenced above, specifically relating to HMDA and CRA reporting.
The purpose for
HMDA was to help determine whether financial institutions are serving
the “housing” needs
of their communities. With this purpose in mind, please explain
to me why the following
HMDA information is being interpreted as it is.
The new definition for refinancing under HMDA states that if a new
loan satisfies and replaces an existing loan; and both existing loan
and new loan are secured by a lien on a dwelling, it is HMDA reportable.
There is no more purpose test.
With this new
definition, I felt we now had the opportunity to report business
purpose loans
that are “predicated” on a 1-4
dwelling that were not previously CRA or HMDA reportable. I was than
told not only are these reportable, but also anything relating to
small business or small farm with a dwelling securing the loan in
any manner (over abundance or additional collateral) was also HMDA
reportable. Nowhere in the new amended regulation is there any reference
to double reporting of loans under HMDA or CRA?
By double reporting the following, false information will be created:
1. Under CRA the census tract is where the business is located;
2. Under HMDA the census tract is where the dwelling is located;
3. If we report according to the new HMDA refinance information given
to me, these types of loans will now have two different census tracts
(a processing nightmare) and HMDA total dollars will now have commercial
loan dollars, in residential census tract numbers.
I was also informed that regulators are to keep in mind the double
reporting when doing a CRA Evaluation. Why would that be?
Is this in fact
an error in information given out to me from the Federal Reserve
Board?
I feel the definition of “refinance” under
HMDA needs more clarification as it applies to business purpose,
not changed. CRA and HMDA are too “tied together” to
be double reporting.
Feel free to contact me should you have any questions.
Sincerely,
Kathleen A. Humke
Vice President / Compliance
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