Use these policies as a starting oint point
CONSUMER LENDING POLICIES
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The maximum aggregate indebtedness of any single member client shall not exceed XXXXXXX.
Credit may be extended to members clients acting as borrower, co-borrower, or co-signer.
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All loans to officials and immediate family members clients on which that official or family member client serves as endorser, co-borrower, co-signer or guarantor, excluding share loans, must be approved by a majority vote of the board of directors before the loan is closed if the loan produces a total in excess of [ENTER AMOUNT HERE].
A return receipt e-mail vote for approval of official and immediate family member client loans is permitted. If the e-mail response is insufficient in obtaining a majority vote a telephone vote is permitted. The loan(s) approved are to be reported at the following board of directors meeting and noted in the meeting minutes.
The term "official" is defined as any member client of the board of directors or supervisory committee.
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Consumer loans will be made to qualifying members clients [ENTER GEOGRAPHIC AREA OR OTHER REQUIREMENTS HERE, IF APPLICABLE] provided adequate protection can be established on the loan security.
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The maximum cumulative unsecured indebtedness to [ENTER ORGANIZATION’S NAME HERE] of any individual member client may not exceed [ENTER AMOUNT].
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- The Loan Representative, shall price the proposed collateral to determine its value and adequacy. In cases of auto loans, recreational vehicles, or boats the Loan Representative shall review the sales contract or purchase order to determine if the collateral is acceptable to the organization.
- The designation of Lending Authority shall be conferred by the Board of Directors; all designated Loan Officers have lending authority within the limits prescribed above.
- The Credit Desk Review (CDR), which consists of the CEO and at least one Loan Officer, will be required on all loans that represent a heightened level of credit risk to the credit union. The purpose of the CDR is to ensure the fair and equal treatment of all loan requests. The CDR may only approve loans that are within the maximum debt-to-income ratio. Requests for exceptions must be referred to the Loan Review Committee for action (if necessary).
- The Loan Review Committee, which consists of the CEO and at least one Board Member client and One Loan Officer, is a source for appeals by individuals who have been denied or offered less advantageous credit terms than were requested. The purpose of the Committee is to ensure the fair and equal treatment of all loan requests. The Committee may override or sustain the decision of the Loan Officer. The Committee may approve loans that exceed the maximum debt-to-income ratio.
- Ultimate authority for the establishing of Loan Policy belongs to the Board of Directors.
- A periodic review of all open-end loans will be performed on a cycle of at least two years.
- A loan set up fee will be assessed at [ENTER AMOUNT].
- No minimum hours are required for full time or part time employees as long as their employer considers them “permanent”. Before applying for a loan, members clients must have three consecutive months of stable employment except if they are recent high school or college graduates.
- Summer/ Winter Skip Option, months of January, February, July and August, are permissible on all loans excluding mobile homes.
- Loan Officers may require members clients with Non-Standard Files to provide a written explanation of any negative credit history, which could be instrumental in the loan decision.
- An organization employee other than the “approving” lender must disburse the funds to the memberclient.
BUSINESS LENDING
GENERAL
Business loans to one memberclient, or to more than one member client using the same collateral shall not exceed fifteen percent (15%) of the organization's net worth…currently XXXXXXXX.
Board members clients and senior management personnel (CEO, Director of Operations, and Director of Lending) are prohibited from obtaining a business loan.
The organization will only do member client business lending on loans collateralized by real estate. The credit union may do non-member client business loan participations secured by taxi medallions in accordance with the loan participation policy.
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The Business Loan Committee will consist of the CEO, the Director of Operations, the Director of Lending(“Management”) and a designated member client of the Board of Directors. The Committee will meet as needed and requires at least threemembers clients to be present of which one member client must have two years Business Lending experience. In the absence of a staff member client having Business Lending experience, the Committee will utilize the resources of an appropriate Third Party. An approval requires a majority of those present.
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