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Reply To: Consumer Loan Disclosed as Commercial

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#11755

KRT
Participant

In looking at the five general factors listed in the commentary for 1026.3(a) – 3(I):

a) Relationship of borrower’s primary occupation to acquisition. Borrower’s occupation is unrelated, so I would consider this a consumer factor.

b) Degree to which the borrower will personally manage the acquisition. Who will manage the acquisition is unknown (likely the borrower), so I consider this a neutral factor.

c) Ratio of income from the acquisition to total income of borrower. Income from the acquisition is unknown, but most likely would be a small percentage of the borrower’s total income. I would consider this a consumer factor.

d) The size of the transaction. This is a relatively small loan, so I would consider this a consumer factor.

e) The borrower’s statement of purpose for the loan. The borrower did not state whether the credit was commercial or consumer, only that he was purchasing artwork for resale. I would consider this a neutral factor.

Based on this analysis of the factors, would you agree with the conclusion that it is consumer purpose?