Question: When lines of credit are renewed, we issue an letter informing the borrower of the renewal and we typically use the date of the letter (i.e., origination date) for the action taken date. A new note is “not” executed. Is that correct or should we rely on the date the renewal was approved by the Bank, based on the CRA Reporting Guidance?
Answer: For a line of credit use the date approved. Using the date of the letter may be accepted by some examiners if the date of the letter is within a day or two of the decision date. I have concerns about your practice. The decision to approve could be made on December 30th and the letter is send on January 2nd. That would push the transaction into a new reporting year.