Wis. Admin. Code Department of Financial Institutions DFI-CU 72.06 - Member business loan policy requirements
A credit union's member business loan policy shall include all of the following:
(1) The types of
business loans the credit union will make.
(2) The credit union's trade area.
(3) The maximum amount of the credit union's
assets, in relation to net worth, that it will invest in member business
loans.
(4) The maximum amount of
the credit union's assets, in relation to net worth, that it will invest in a
given type of business loan.
(5)
The maximum amount of the credit union's assets, in relation to net worth, that
it will loan to a member or associated members, subject to s.
DFI-CU
72.08.
(6)
The qualifications and experience of personnel involved in making and
administering business loans.
(7) A
requirement for analysis and documentation of the ability of the borrower to
repay the loan.
(8) A requirement
for the receipt and periodic updating of financial statements and other
documentation, including tax returns.
(9) A requirement for documentation
sufficient to support each request to extend credit, or increase an existing
loan or line of credit, except where the board of directors finds that the
required documentation is not generally available for a particular type of loan
and states the reasons for those findings in the credit union's written
policies. The documentation shall include all of the following:
(a) Balance sheet.
(b) Cash flow analysis.
(c) Income statement.
(d) Tax data.
(e) Analysis of leveraging.
(f) Comparison with industry average or
similar analysis.
(10)
Collateral requirements, including all of the following:
(a) Loan-to-value ratios.
(b) Determination of value.
(c) Determination of ownership.
(d) Steps to secure various types of
collateral.
(e) A schedule as to
how often the credit union will reevaluate the value and marketability of
collateral.
(11) The
interest rates and maturities of the business loans.
(12) General loan procedures, including all
of the following:
(a) Loan
monitoring.
(b) Servicing and
follow-up.
(c)
Collection.
(13)
Identification of those individuals prohibited from receiving member business
loans.
(14) Guidelines for purchase
and sale of member business loans and loan participations, if the credit union
intends to engage in these activities.
Notes
The Office of Credit Unions recognizes that all of the provisions of the policy may not apply to every loan.
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