Use the following procedures as a guideline to develop your own organization's lending procedures

YOUR ORGANIZATION’S NAME has established these guidelines to advocate fair lending practices, assessing not only the applicant's ability and willingness to pay but the potential risks and benefits to the ORGANIZATION as a whole.  

All clients who that have saved with the Organization for at least six months may borrow a maximum of three times his or her savings.  The rate of interest for the loan shall be XX% per annum at a reducing balance basis.

Loan Products

 No matter why the client needs to borrow, YOUR ORGANIZATION’S NAME makes it easy.  We offer a range of lending products to fit their needs. Our competitive interest rates and convenient application process make YOUR ORGANIZATION’S NAME the right choice for the clients’ borrowing needs. 

 Personal Loans:

 Qualifying clients can apply for a Personal Loan.  Personal Loans allow the clients to use their good credit to borrow a specific amount over a pre-determined term.  Personal loans include:

• Emergency Expenses
• School Fees
• Loan consolidation

Business Loans: 

YOUR ORGANIZATION’S NAME offers a variety of lending solutions for our business owners.  We are here to help our clients further develop their businesses through effective funding options and training programs. 

• Purchase or refinance of machinery, equipment, or other capital assets
• Permanent working capital, business acquisition, debt consolidation
• Amortizations up to 7 years
• Flexible terms

Equal Credit Opportunity

YOUR ORGANIZATION’S NAME promotes a lending policy that prohibits discrimination against any applicant on the basis of race, religion, sex, and ethnic background, source of income, marital status or age. 

 Definition of Applicant 

An "applicant" is any person who directly applies for an extension, renewal or continuation of credit.

If the ORGANIZATION, after using objective nondiscriminatory standards, determines the applicant requesting individual credit cannot support the credit, the ORGANIZATION may request the applicant obtain a co-signer or guarantor. 

 Truth-in-Lending 

• Maintain loan documents that comply with Regulatory requirements.
• Promptly notify the borrower of any change in terms, which requires notice.
• Resolve all error inquiries within established time limits.
• Maintain the use of periodic statements, which meets all disclosure    requirements.
• Notify borrower of "right to rescind" where applicable.

Cross-Collateralization Clause 

 The ORGANIZATION reserves the right to include a "Cross-Collateralization" clause on its loan agreement that states the subject loan stands as collateral for all other loans previously or subsequently extended to the borrower, as long as this disclosure is contained in all loans in question.  It will also allow for the collateral securing a previous loan to serve as collateral for the new loan.  It is understood that the security exists only for the life of the subject loan.   

 Notification of Adverse Action 

 YOUR ORGANIZATION’S NAME will notify an applicant of a credit denial in writing within:

• Thirty (30) days after receiving a completed application and denying or taking adverse action
• Thirty (30) days after receiving an incomplete application, offering a "reasonable" time period to complete the application.  Applicant must be informed of the specific information required to complete application.  Applicant must also be notified that the application will not receive further consideration if the information is not submitted as required.

• Thirty (30) days after taking adverse action on an existing account.

• Thirty (30) days after a conditional approval have been given and applicant has been offered reasonable time period to comply with loan contingency.

• Ninety (90) days after making a counter-offer, if the applicant has not expressly accepted or used the credit granted.

 An adverse action has been taken when:

• A loan has been turned down.

 Credit in the terms or amount applied for, is refused (i.e. a counter-offer is made) and the applicant does not accept the counter-offer.

 Note:  if the applicant accepts the counter-offer, no adverse action has occurred.  If the applicant does not accept the counter-offer within ninety (90) days from the time it is made, the adverse action notice must be sent.

• Refusal to increase the limits of an open-end loan account or a reduction or closing of the credit line, if a similar adjustment is not made to all holders of an open-end account.

• A conditional approval has been granted yet applicant has failed to provide information required or meet the terms of contingency agreement.

 When adverse action is taken, the applicant will be provided with a notification containing the following:

• A statement of the action taken using the Loan Adverse Action Notice form.
•  The specific reasons why adverse action was taken or the applicant's rights to those reasons within thirty (30) days after they are requested.
•  The name, address and phone number of credit reporting agency used in credit decision.

 Note:  When a co-signer or co-applicant is rejected, they must also be sent an adverse action notice indicating the reasons for denial.