PDF CREDIT UNION LOAN POLICY MANUAL

CREDIT UNION LOAN POLICY MANUAL

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Loan Policy Manual

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Index

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Loan Policy Manual

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Index

Page Credit Union Philosophy.......................................................................7

General Policy Statements A. Statement of Purpose....................................................................9 B. Non-Discrimination....................................................................10 C. General Lending Considerations.....................................................11 D. Controls and Underwriting............................................................12 - Quality Control of Underwriting - Previous Losses - Employment and Income Verification - Bankruptcy Indicators - Derogatory Items - Employee Loans - Official's Loans - Board Approval E. Risk Based Pricing.....................................................................17 - Background - Why Risk Based Pricing - Advantages - Loans Eligible for Risk Based Pricing - Type of Risk - Ability to Adjust Rates - Discounting Rates - Multiple Scores, Choosing the Right Rate - The Right Mix of Paper Grades - Matching Rates - Setting Rates - Pricing Loans o Consumer o Real Estate F. Terms....................................................................................23 G. Blended Rates...........................................................................24 H. Consumer Loans........................................................................25 - Secured Versus Unsecured - Unsecured Guidelines - Limits - Terminating Lines of Credit - Annual Review of Revolving Credit - Insurance Requirements - Age of Collateral - Redeeming of Security

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- Auto Loans - Boat Loans - R.V. Loans - Motorcycle Loans - Unsecured Loans - Credit Cards - Credit Re-Builder Loans - First Time/Young Borrowers Underwriting Guidelines - Consumer Credit Counseling Loans - Bounce Free Loans - Chattel Loans - Certificate/Share Loan or Share Estate - Youth Loans I. Loan Approval Authority..............................................................40 J. Lending Authority Matrix for Decision Making....................................41 - Matrix - Requirements of Level 1, Level 2 and Level 3 - Decision Making Guidelines Employees are

Expected to Follow for Marginal Loan Approvals K. Overdraft Privilege Authority.........................................................46

- Employees - Eligibility - Suspension/Removal of Privilege - Monitoring and Reporting - What's Covered - Charge Offs - Marketing/Disclosure - Payment Order of Items - Fee Limits - Repayment Plan - Loss Allowance - Program Usage - Additional Disclosure Language - Waiver L. Debt Ratios...............................................................................51 M. Credit Committees.....................................................................52 N. Denials...................................................................................53 O. Release of Collateral...................................................................54 P. Exchange of Collateral.................................................................55 Q. Counter Offers...........................................................................56 R. Real Estate Loans.......................................................................57 - Purpose - Flood Insurance - Home Mortgage Disclosure Act - Compliance - Appraisals

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Loan Policy Manual

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- ALM Requirements

- Advertising

- Types of Mortgage Loans Offered o 1st Mortgage Loans ? Loan Application ? Security Agreement ? Other Documentation ? Required Disclosures ? Maximum Loan Limits ? Loan Approval ? 1st Mortgage Portfolio Adjusted Rate o Non Agency Single Wide Mobile Homes o First Mortgage Portfolio Product ? Greater Than 90% o Residential Lot/Acreage Loans o Construction/Permanent Loans o Home Equity Loans ? Closed End ? Variable Rate Index ? Open End ? Extra Equity Loans ? Documentation ? Eligible Property ? Extra Equity ? Fast Equity

S. Work Out Loans........................................................................68

T. Indirect Lending, General Policy.....................................................69

- Policy Statement

- Dealership Eligibility

- Reserves

- Contracts

- Membership Eligibility

- Underwriting Standards

- Loan Contract Agreement

- Rates/Fees (Authority of Management)

- Lines of Credit (Liquidity)

- Marketing

- Monitoring

- Collection Practices

U. Pre-Approved Auto Draft..............................................................77

V. Member Business Loan Policy........................................................83

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Loan Policy Manual

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