EPB Employees Credit Union
It is declared policy of this credit union
to comply with the letter and intent of all applicable laws of the
United States and of the state and regulations promulgated thereunder.
This policy is specifically intended to include all facts of the
granting of credit and making loans, the handling and processing
of credit applications, credit inquiries, information concerning
interest rates, credit terms and costs, earnings and penalties on
shares and all other requirements of the Federal Consumer Credit
Protection Act and associated regulations.
As required by law, membership in this credit
union is open only to individuals who are included in the field of
membership, as it is defined in the credit union by-laws. No member
will be denied any service of this credit union due to discrimination
because of race, color, religion, national origin, sex, marital status,
or age (provided that the applicant has the capacity to enter into
a binding contract), the fact that all or part of the applicant's
income derives from any public assistance program, or the fact that
the applicant has, in good faith, exercised any right under the
Consumer Protection Act or any similar state law.
No officer or staff member of this credit
union will, in any manner, discourage a member from submitting an
application for credit. This credit union will accept and consider
an application from any member who wishes to submit a request for
credit. Such requests must be in writing via the appropriate Credit
Union loan application form or check endorsement clause. Solely
verbal requests will not be honored.
No credit will be extended to any person who
has caused the credit union a loss and who has not voluntarily repaid
the loss or who is not voluntarily repaying the loss, whether the loss
was by bankruptcy or otherwise.
No credit will be extended to any person who
does not comply with all requirements and qualifications of The USA
Patriot Act, The Treasury Department's Office of Foreign Assets Control,
and applicable Credit Union policies.
Loans to Credit Union personnel, Board or
Committee members will be underwritten in the same manner as that
of the regular membership.
Loan officers are prohibited from approving
their own loan(s) or those of their next of kin.
- TYPES OF LOANS
- The following types of loans are available to members:
- Visa and MasterCard Credit Cards
- Share Pledged (Credit Union accounts only)
- Vehicle Secured (including Auto, Truck, Motorcycle, Recreational
Vehicle and Watercraft)
- Farm Equipment
- Lot (subdivision)
- Land (acreage)
- Home Equity
- First Mortgage
- The following types of loans are not available at this time:
- Mobile Home
- Modular Home
- Snow Mobiles
- Savings/Certificates on Deposit at Other Financial Institutions
- Construction Only
- LENDING TERRITORY
- Mortgage secured property must be located within the following counties:
- Tennessee: Hamilton, Bradley, Marion, Sequatchie, Bledsoe, Rhea
- Georgia: Dade, Walker, Catoosa, Whitfield
- Alabama: Jackson, Dekalb
Vehicle secured loans must on vehicles titled
within any of the 50 states of the United States of America.
Unsecured loans and share pledged loans have
no territorial restrictions.
- LIMITATIONS AND RATES
- Loan Amount Limitations:
- * Maximum loan amount:
The total maximum dollar amount of all loans
to one member from this Credit Union will not exceed $250,000. The
only exception that would allow a higher dollar amount is the
exclusion of share pledged loans, and only in the case in which
pledged shares belong to the borrower.
The total of all fixed-rate mortgage loans with terms in excess of
five (5) remaining years cannot exceed 25% of Credit Union assets.
Credit Cards: the minimum credit limit
shall be $300, and the maximum credit limit will be $12,500 with
no additional Credit Union unsecured loan(s); otherwise, any other
unsecured loan amount must be deducted from the approved credit
limit of all EPB Employees Credit Union credit cards.
Signature and Co-maker: the minimum new
loan amount is $500, the maximum amount is $12,500 less any credit
limits of any EPB Employees Credit Union credit cards.
Share pledged loan amounts up to 100% of
the share balance on EPB Employees Credit Union share accounts only.
Vehicle secured: 100% of dealer invoice on
new vehicles for members with good credit; 100% of trade-in value
(plus local and state sales taxes) on used vehicles for members
with good credit; otherwise, 95% of trade-in value (plus local
and state sales taxes) on new/used vehicles for members with less
than favorable credit.
Lot/Land: 80% of the sales price or appraised
value, whichever is less. The minimum loan amount is $5,000.
Home Equity: up to 90% of the appraised
value less the first mortgage loan balance, if any. The minimum
advance amount is $500; the minimum line of credit is $5,000.
First Mortgage: 90% of the sales price or
appraised value, whichever is less. The minimum loan amount is $20,000.
Construction-Permanent: up to 80% of the
appraised value. The minimum loan amount is $20,000.
- Loan Term Limitations:
- Term Notes: (no installment payments, balance due upon maturity):
- Signature/Co-maker loans can be made for a term of up to 90-days.
Up to two like-term renewals are permitted.
- Share pledged loans are usually made for 90-day terms, but can be
made up to a 180-day term. Multiple like-term renewals are permitted
on share pledged loans.
- Installment Loans: Maximum terms are:
- Credit Cards: open-ended, must pay at least 5% of balance per month.
- Signature/Co-maker: 4 years.
- Share Pledged: 5 years.
- Vehicle: New - 6 years, Used - 5 years, Recreational Vehicle - 8 years.
- Lot/Land: 15 years.
- Home Equity: 10 years.
- First Mortgage: 30 years.
- Interest Rates:
- Loan rates will be adjusted periodically by the Board of Directors.
- Tiered rates are available for shorter-term loans.
- The Share Pledged Loan rate is set by the Board of Directors.
Basically this is a flat rate that will be charged on all loans
secured by non-certificate share deposits. For share certificate
collateral, the rate is 2% above the certificate rate, provided
the loan rate is equal to or more than the basic flat rate approved
by the Board. If two or more accounts are pledged, the loan rate will
be 2% above the highest rate of the accounts being pledged.
- The Home Equity Loan interest rate adjusts annually on
January 1st based on the Wall Street Journal prime rate
quoted on December 21st, or the last business day before
December 21st should that day fall on a weekend, plus a
margin of 1.25 percent. There is a floor rate of 8.00%. The Board
of Directors may act to lower the Home Equity Loan rate for the
calendar year on existing loans due to market or economic conditions.
- Any term loan made for $1,000.00 or less cannot have an interest
rate in excess of 10.00%. Any term loan $1,000.01 or more is subject
to current loan rates.
- Interest Rebates:
- The Board of Directors will decide which loan types, what
percentage rate and when or if any interest rebate will be paid
- The loan interest rebate is based on the Credit Union's
ability to pay and profit performance for the year.
- Any rebate will be paid on the last day of the calendar year.
The actual dollar amount per each loan will be deposited into the
borrower's Primary Share Savings Account. If the Primary Share
account is closed as of the close of business on December 31st,
then no loan rebate will be paid.
- The rebate is based on a percentage of total interest paid per
loan during that calendar year.
- LOAN DOCUMENTATION
Loan documents will be retained in a loan
file folder for each individual. Additional file folders for
each loan type can be used if needed.
Closed loan files will be kept in the
Credit Union's main office vault when no longer needed for
underwriting, approval or closing purposes.
The Credit Union will use CUNA Mutual
Group's LOANLINER forms on all loans except credit card and
mortgage loans. The Credit Union will use an "in-house" loan
application on credit card loans. The Credit Union will use
FHLMC/FNMA loan documents on first mortgage real estate secured
loans. All documents furnished by title companies will be included
in each first mortgage or home equity loan file folder.
The LOANLINER Application and LOANLINER
Credit Agreement must be no older than three years.
All new loans or add-ons will have a recent
credit report (no older than six months from date of application)
at the time of approval.
Evidence of verification of income must be
maintained in at least one loan file if multiple loans are involved
unless the member is an employee of EPB.
Each loan will have evidence of the monthly
debt-to-income ratio calculation.
Secured loans will contain actual security
documents (title, security deed, etc., or if a share pledged loan,
a hold placed on the deposit account(s)).
Insurance - the Credit Union must be shown
as lien holder and the coverage amount must be sufficient to pay
the loan should a claim occur:
- Hazard insurance coverage on the dwelling must be evident
in each mortgage secured file if structure value is used in
- Flood insurance coverage on the dwelling must be evident
in each mortgage secured file if structure value is used in the
appraisal, unless a survey indicates the actual dwelling is not
located in the flood area.
- Collision insurance must be evident in each vehicle secured
- ** CUNA Mutual Insurance Company's "Members Choice" Program
is available through the Credit Union. It is a member-pay program that
is offered to the member for each loan. All terms and conditions
are subject to CUNA's program. CUNA's Loan Protection (LP)
insurance program will be discontinued April 1, 2005.
- CUNA Disability insurance (CDI) is optional and must be requested
by and paid by the borrower if such coverage is desired.
- Title insurance is required on first mortgage loans for the
loan amount. A mortgagee's title policy naming the Credit Union
is required on first mortgage loans for the loan amount. This must
be a standard ALTA policy that is acceptable in the secondary
- LOAN COMMITTEE
- The Board of Directors will appoint at least three Credit
Union members to the Loan Committee.
- The Loan Committee will give final approval/disapproval on any
loan that the Loan Officer has recommended or submitted for such
- The Loan Committee will recommend to the Board any additions,
deletions or changes to the types of loans being offered to the
- The Loan Committee will submit a monthly report to the Board
on loans approved/disapproved during the month.
- The Loan Committee may review at its option any loan files for
- The Loan Committee shall report to the Board any practices,
concerns or discrepancies that are in violation of this policy.
- The Loan Committee will appoint one or more loan officers.
- LOAN OFFICERS
The Loan Committee will appoint one or more
Loan officers shall be duly qualified either
through in-house training and/or previous experience.
Loan approval limits are restricted only as
outlined in Section V, Paragraph A above.
Loan Officer Duties:
- To conduct an initial interview with each applicant to determine
the purpose of and qualification for credit.
- To collect all documents pertinent to each loan type.
- To underwrite all loan applications based on the guidelines,
requirements and limitations set forth in this policy.
- To approve or disapprove all loan applications based on the
- To close, or to have closed, all approved loans within a
reasonable period of time from date of application.
- To complete the "Denial of Credit" letter on all disapproved loans.
- To provide to the Loan Committee loan closed data for monthly
reporting to the Board.
- UNDERWRITING GUIDELINES
- Qualified Members in Good Standing.
Credit can only be extended to qualifying members of this Credit
Union who are in good standing:
- Loans with the Credit Union that are delinquent must be
brought current (before or with this new loan).
- Deposit accounts that may have a negative balance must be
brought to zero or to a positive balance.
- Any loans charged off in the past must be voluntarily
- Evidence of income must be shown in each loan file except
for share pledged loans.
- Income must be verified either by check stub, verification
of employment form, last two years' tax returns or by telephone
call to the employer.
- Income from overtime must be averaged over the previous 12
- Income from commissions must be averaged over the previous
- Overall Monthly Debt-to-Loan Ratio:
- This ratio is computed by taking the proposed principal &
interest (P&I) payment, adding it to all remaining loan payments
that will be due for at least six more months, and dividing that
figure by the borrower's gross income.
- The overall monthly debt ratio shall not exceed 50%.
- On first mortgage loans, this ratio shall not exceed 40% unless
the L/V ratio is 70% or less, but never to exceed 50% regardless of
the L/V ratio.
- Evidence of the debt-to-loan ratio calculation shall be placed
in every loan file.
- Credit Reporting:
- A credit report will be obtained from the local credit bureau
on all loan types.
- An existing report may be used with a second loan or add-on
loan provided the report is no older than six months.
- The loan officer must verify the correct name, social security
number, address, employment and credit obligations to those items
shown on the loan application.
- Beacon Scores: A Beacon Score less than 525 will be sufficient
cause for credit denial unless extenuating circumstances are noted.
Such acceptable circumstances are: same loan reported more than once,
reported loan(s) does not belong to applicant, spouse or family
member is paying loan, medical problems due to illness or accident,
- Current bankruptcy is sufficient cause for credit denial.
A dismissed bankruptcy within the past 7 years is sufficient cause
for credit denial. Any bankruptcy that causes or has caused the
Credit Union to receive less interest or principal is sufficient
cause for credit denial, unless that member has voluntarily repaid
all interest/principal due at the time the charge-off occurred.
- Outstanding judgements and/or collections will be sufficient
cause for credit denial unless these items are satisfied via this
- Appraisal Reports:
- Appraisal reports are required on all first mortgage and home
- Appraisals must be made according to the guidelines established
in the Credit Union's Appraisal Standards and Appraiser Qualifications
- A report cannot be greater than one year old without being updated
by a certified and licensed real estate appraiser.
- Appraisals made on an "as is" condition basis are acceptable as
long as the house is in a livable condition.
- American Invoice Service (AIS) New Car Cost Guide:
- For credit worthy members, up to 100% of the dealer invoice,
including state and local taxes, warranty, if any, shipping cost
and title work shall be added together to establish vehicle value.
However, the loan amount cannot exceed the Manufacturer's Suggested
Retail Price as shown in the AIS New Car Cost Guide.
- For less favorable credit worthy members, up to 95% of the dealer
invoice, including state and local taxes, warranty, if any, shipping
cost and title work shall be added together to establish vehicle value.
However, the loan amount cannot exceed 95% of the Manufacturer's
Suggested Retail Price as shown in the AIS New Car Cost Guide.
- NADA Used Car Book:
- Of the three columns of values listed, the "Trade-in" column
will be used to determine value. The Credit Union will accept this
value (adjusted appropriately for add-ons and mileage) plus local
and state sales taxes.
- The loan officer can give credit for add-ons and extras (towing
hitches, bed liners, etc.) not listed in the NADA book. Also, a
"taken care of" vehicle condition can add value. However, final
vehicle value should never exceed the "Retail Value" column
- NADA Old Car Book:
- The Trade-in value column will be used adjusted by add-ons and mileage.
- Local and state sales taxes can be added to this value.
- Other Values:
- Should a vehicle not be listed in the AIS or NADA books, the loan
officer may use similar documentation available from a dealership or
- The Trade-in value column will be used adjusted by add-ons and
- Local and state sales taxes can be added to this value.
- Mortgage Insurance:
Mortgage insurance must be used on real estate loans in excess
of a 90% loan-to-value (L/V) ratio. Mortgage insurance is optional
on mortgage loans with less than a 90% L/V should the loan officer
feel the loan is too weak without it.
- ELECTRONIC LOAN APPROVAL
- Loan applications/approvals are permissible via telephone
- Loan applications/approvals via the Internet are not
available at this time.
- SHARE PLEDGED LOAN EXCEPTION
- Loans made to the owner of the pledged share account.
- There are no limitations on the debt ratio or credit report
- This loan type is excluded from the debt ratio calculation
in the event other types of loans are made to the same member.
- Loans made to a non-owner of the pledged share account.
- The borrower must meet all the underwriting guidelines to
qualify for a share pledged loan when the shares belong to another
- Loan amount limitations and credit report requirements apply as
- REVIEW AND AUDIT PROCEDURES
After each loan is closed and placed on the
Credit Union's computer system, Credit Union management will have
each loan file reviewed and compared to the data input to assure
that all terms of the loan agree with the computer system.
Evidence of each review will be placed in
the loan file.
The external auditor will verify annually
with the membership each loan with a balance over $50,000. Audit
confirmations will be mailed to a random selection of members with
loans under $50,000.
Management will utilize computer loan reports
to monitor any changes to existing loans.
* Revised: 7/28/2004
** Revised 3/16/2005