Primary NCUA Lending Regulations Flashcards

1
Q

Y or N
Does NCUA require federal credit unions to have written loan policies?

A

Yes, the NCUA requires all federal credit unions to have written loan policies approved by the credit union’s board of directors.

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2
Q

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

A

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.

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3
Q

What is the loan limit set per borrower?

A

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.

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4
Q

Y or N
Does NCUA set limits on the amount of money that can be loaned to credit union officials?

A

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.

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5
Q

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.

A

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.

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6
Q

What is a “statutory lien”?

A

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.

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7
Q

What is the main objective of the Credit Practices rule?

A

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.

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8
Q

How does the Credit Practices rule define pyramiding of late charges?

A

Pyramiding – the assessment of multiple late charges based on a single late payment that is subsequently paid.

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9
Q

What does this rule require credit union to disclose to a co-signer?

A
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