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Under Regulation C, is the bank required to report non-amortizing features for commercial as well as consumer loans?

Under Regulation C, (the Home Mortgage Disclosure Act’s implementing regulation), is the bank required to report non-amortizing features for commercial as well as consumer loans?

Yes. This data point must be reported for both consumer and commercial purpose loans.

Regulation C’s §1003.4(a)(27) requires reporting of contractual features that allow payments other than fully amortizing payments. Section 1003.4(a)(27) defines such contractual features by reference to definitions in Regulation Z (Truth in Lending Act) i.e., balloon payment loans, interest-only payment loans, loans that result in negative amortization, and any other loan that would allow payments other than fully amortizing payments. However, as explained in Comment 1 to this section, this reference to Regulation Z is limited to those definitions and has nothing to do with whether the loan is a Regulation Z covered loan, i.e., a consumer loan, or the property a “dwelling” as defined in Regulation Z’s §1026.2(a)(19). The example in Regulation C’s comment to §1003.4(a)(27) assumes that a financial institution originates a business-purpose transaction that is exempt from Regulation Z to finance the purchase of a multifamily dwelling and that there is a balloon payment, as defined by Regulation Z, at the end of the loan term. The multifamily dwelling is a dwelling under Regulation C’s §1003.2(f) but not under Regulation Z’s §1026.2(a)(19). In this example, the financial institution should report the business-purpose transaction as having a balloon payment under §1003.4(a)(27)(i), assuming the other requirements of this part are met. Aside from these distinctions, financial institutions may rely on the definitions and related commentary provided in the appropriate sections of Regulation Z referenced in §1003.4(a)(27) of this part in determining whether the contractual feature should be reported. (May 2018)

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