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All loans to officials and immediate family clients members on which that official or family client member 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 client member 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 client member of the board of directors or supervisory committee.
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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 client member 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, 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 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 client.
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Business loans to one client, or to more than one client using the same collateral shall not exceed fifteen percent (15%) of the organization's net worth…currently XXXXXXXX.
Board clients members and senior management personnel (CEO, Director of Operations, and Director of Lending) are prohibited from obtaining a business loan.
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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 client member of the Board of Directors. The Committee will meet as needed and requires at least three clients members to be present of which one client member must have two years Business Lending experience. In the absence of a staff client member 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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