If you had a chance to review the “Section 1071 Small Business Lending Application Coverage Flowchart” we released in our FREE Lending Tools earlier this week, you would have seen the following question toward the bottom:*
Will the proceeds be used to purchase (dwelling), refinance (previous dwelling secured loan/line) or improve a dwelling?
Answering “yes” results in “NOT 1071 Reportable” while “no” results in “1071 Reportable”. Why? Because 1071 excludes the reporting of commercial loans/lines that would be HMDA-reportable (aka dwelling-secured loans made for purchasing, refinancing or improving a dwelling). Non-HMDA reporting institutions especially will have their work cut out for them to understand and apply this 1071 exemption.
In other words, even if you are a non-HMDA institution, you MUST have an understanding of what is and what is not a HMDA-reportable loan. This comes into play when counting loans to determine if you are subject to 1071 and, if you are subject to 1071, which applications you must exclude from your 1071 reporting.
Jerod explains more in the video:
*To find the flowchart go to the Free Tools then in the search bar type "1071".
Published
2024/07/17
