NCUA LENDING REGULATIONS Flashcards
Does NCUA require federal credit unions to have written loan policies?
Yes OR No
Yes, the NCUA requires all federal credit unions to have written loan policies approved by the credit union’s board of directors.
NCUA allows credit unions to advance money to members to cover overdrafts without having a credit application from the borrower if the credit union has a written policy on account overdrafts. List two of the four items required in this policy.
The policy must: 1) set a cap on the total dollar amount of all overdrafts the credit will honor; 2) establish a time limit not to exceed 45 calendar days for the member to deposit funds or obtain an approved loan to cover the amount of the
overdrafts; 3) limit the dollar amount of overdrafts the credit union will honor per member; and 4) establish a fee and interest rate to be charged to members for honoring overdrafts.
What is the loan limit set per borrower?
Loans or lines of credit to one borrower, when aggregated with any other loans to that borrower, cannot exceed 10% of the credit union’s total unimpaired shares and surplus.
Does NCUA set limits on the amount of money that can be loaned to credit union officials?
Yes OR No
The credit union’s board must review and act on loan applications to credit union officials if the aggregate loan amount will exceed $20,000 plus pledged shares
in the aggregate.
What four ways does Section 701.39 Statutory Liens allow credit unions to use to provide advance notice of the statutory lien right to members?
The notice can be provided: 1) on account opening documents, 2) on loan documents, 3) by e-mail, or 4) on the credit union’s website.
What is a “statutory lien”?
A right or claim to a member’s shares and dividends equal to the amount of any outstanding financial obligation the member owes to the credit union.
What is the main objective of the Credit Practices rule?
The main purpose is to prohibit the use of certain contract terms that: 1) are not necessary to protect creditors against losses; and 2) deprived consumers of protections provided by state and federal law.
How does the Credit Practices rule define pyramiding of late charges?
Pyramiding – the assessment of multiple late charges based on a single late payment that is subsequently paid.
What does this rule require a credit union to disclose to a co-signer?
Before a co-signer can be obligated on a loan, the credit union must fully inform the co-signer of the nature and extent of potential liability
