LENDING POLICY Clause Samples
A Lending Policy clause defines the rules and criteria under which a lender will provide loans or credit to borrowers. It typically outlines eligibility requirements, acceptable collateral, interest rates, repayment terms, and any restrictions on the use of funds. By establishing clear guidelines for lending, this clause helps ensure consistency in lending decisions and manages the lender’s risk exposure.
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LENDING POLICY. (1) Within sixty (60) days, the Board shall review and revise the Association’s written loan policy. In revising this policy, the Board shall refer to 12 C.F.R. §§ 160.93 and 160.170 (Lending Limitations and Records for Lending Transactions). This policy shall incorporate, but not necessarily be limited to, the following:
(a) a description of acceptable types of loans that will ensure that:
(i) commercial lines of credit are not extended to borrowers for unknown or inappropriate purposes including but not limited to use as a source of permanent working capital, to make speculative investments, or for unknown purposes; and
(ii) lending management employs prudent lending practices in its area of land development loans and ceases prior practices in which loans were originated with high loan to value ratios, financing was extended to pay for developer’s soft costs, and lending management renewed loans without requiring the necessary principal reductions or terming out loans over a reasonable repayment period.
(b) a provision that current and satisfactory credit information will be obtained on each borrower;
(c) maturity scheduling related to the anticipated source of repayment, the purpose of the loan, and the useful life of the collateral;
(d) maximum ratio of loan value to appraised value or acquisition costs of collateral securing the loan;
(e) collection procedures, to include follow-up efforts, that are systematically and progressively stronger;
(f) a pricing policy that takes into consideration costs, general overhead, and probable loan losses, while providing for a reasonable margin of profit;
(g) a definition of the Association’s trade area;
(h) guidelines and limitations for loans originating outside of the Association’s trade area;
(i) a limitation on aggregate outstanding loans in relation to other balance sheet accounts;
(j) distribution of loans by category;
(k) guidelines for loans to insiders, including a statement that such loans will not be granted on terms more favorable than those offered to similar outside borrowers;
(l) guidelines and limitations on concentrations of credit;
(m) a limitation on the type and size of loans that may be made by loan officers without prior approval by the Board or a committee established by the Board for this purpose;
(n) measures to correct the deficiencies in the Association’s lending procedures noted in any ▇▇▇;
(o) guidelines designed to improve Board oversight of the loan approval process, specifically wit...
LENDING POLICY. (1) Within sixty (60) days, the Board shall review and revise the Bank's written loan policy. In revising this policy, the Board shall refer to the Loan Portfolio Management booklet, A-LPM, of the Comptroller’s Handbook. This policy shall incorporate, but not necessarily be limited to, the following:
(a) a description of acceptable types of loans;
(b) a provision that current and satisfactory credit information will be obtained on each borrower;
LENDING POLICY. The Lending Policies attached hereto as Attachment 5 are hereby incorporated herein as the applicable Lending Policies as of the Effective Date, and the Lending Policies, as amended from time to time, are also hereby incorporated as part of this Servicing Agreement. The Lending Policies must be able to be reasonably administered by the Servicer, be consistent with the provisions of this Servicing Agreement, Regulations, the applicable Program Rules and applicable law, and cannot be amended without sufficient prior notice to the Servicer to allow implementation of any servicing modifications. The Lending Policies will be reviewed and updated by the Holder if deemed necessary on at least an annual basis or as required by Regulations or applicable law or as any Program Rule changes may occur. To the extent that a change in the Holder’s Lending Policies require the Servicer to implement operational changes or systems modifications, the cost of such changes and modifications may be borne by the Holder.
LENDING POLICY. (1) Within ninety (90) days, the Board shall review and revise the Bank's written loan policy. In revising this policy, the Board shall refer to the Loan Portfolio Management booklet, A-LPM, of the Comptroller’s Handbook. The revisions shall include, but not be limited to:
(a) guidelines and standardized formats to ensure consistent loan presentations with narrative details supporting financial and repayment analysis, collateral values, and the borrower’s strengths and weaknesses;
(b) a provision that current and satisfactory credit information will be obtained on each borrower;
(c) procedures to correct outstanding credit and collateral exceptions, and an aggregate report of uncorrected exceptions, identified by officer responsibility;
(d) amendments to the Bank’s current loan policy to establish reasonable underwriting and credit administration standards for real estate and construction loan concentrations including:
(i) requirements for feasibility studies and sensitivity and risk analysis;
(ii) minimum equity requirements for each type of lending;
(iii) standards and limits for non-amortizing loans;
(iv) standards and limits for interest reserves;
(v) pre-leasing and pre-sale requirements for income producing real estate;
(vi) types of acceptable guaranties and requirements for guarantor support;
(vii) minimum covenants for loan agreements; and
(viii) requirements for takeout commitments.
(e) systems to track compliance with loan policy standards including:
(i) identifying all policy exceptions, both in aggregate and by officer;
(ii) identifying and reporting supervisory loan-to-value exceptions;
(iii) developing a policy exception report for the Board; and
(iv) developing and implementing a post-closing review of loans to ensure compliance with loan committee approval terms, and identification of any policy exception.
(f) enhancements to loan policy to clarify when covenants are appropriate, including:
(i) curtailment plans or expectations;
(ii) spec to pre-sold expectations;
(iii) minimum debt-to-service requirements;
(iv) minimum financial covenants such as liquidity or net worth; and
(v) default provisions if there is evidence of discrepancies between construction funded and completed.
(g) appraisal processes that ensure:
(i) independent appraisal review for all 12 CFR Part 34 appraisals; and
(ii) appraisal review requirements including narrative comment about significant assumptions and conclusions.
(h) guidelines and limitations on concentrations...
LENDING POLICY. (1) The parties acknowledge that the Bank has forwarded its revised and updated loan policy to the Assistant Deputy Comptroller for review and determination of no supervisory objection.
(2) Upon receipt of no supervisory objection from the Assistant Deputy Comptroller the Board shall oversee the implementation of the Bank's revised and updated loan policy and ensure Bank adherence to the policy.
(3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the loan policy.
LENDING POLICY. Each library will maintain on the TexShare Web a current record of privileges and limitations applicable to this Agreement, including collections or types of materials not subject to the borrowing privileges conferred under this Agreement, so a prospective borrower may become acquainted with the regulations of the lending library.
LENDING POLICY. Due to the many special exhibitions taking place15, museums borrow a great deal of works of art from each other. Such temporary exhibitions would be impossible without lending. The lending could be arranged on a virtual internet market, where the suppliers (the museums owning art works) offer to lend (some of) their holdings at a specific price and under specific conditions, and the demanders can choose. But it would also be possible on a smaller scale, even between two museums. Introducing prices, instead of barter, has many obvious advantages that need not be discussed further here.
LENDING POLICY. (1) Within sixty days of the date of this FA, the Board shall review and revise the Bank's written loan policy to address specific weaknesses identified in commercial real estate lending. In revising this policy, the Board shall refer to “Commercial Real Estate and Construction Lending” booklet of the Comptroller’s Handbook. This loan policy shall be expanded to incorporate, but not necessarily be limited to, the following:
(a) guidance on the use of specific loan covenants for all types of loans in credit agreements;
(b) process to track absence of specified covenants as well as borrower noncompliance with covenants as policy exceptions;
(c) guidelines for reasonable repayment terms based on the type of commercial real estate loan and/or performance of the project including maturity scheduling related to the anticipated source of repayment, the purpose of the loan, and the useful life of the collateral;
(d) guidelines under (c) above should include consideration of guarantor support and use of curtailment payments to maintain reasonable repayment terms;
(e) procedures for stress testing individual loans at origination and periodically through the life of the loan. The procedures should address stressing of factors including, but not limited to, sales prices, absorption or holding period, discount rates, interest rate, capitalization rates, vacancies, and net operating income based on actual rental income and expenses;
(f) guidelines for obtaining updated appraisals or other collateral valuations and maintaining borrower equity that are consistent with the standards of 12 C.F.R. Part 34, Subpart C and Subpart D. The policy guidelines should specify criteria when re-margining should be considered to maintain borrower equity in the project;
(g) guidelines for renewals or extensions consistent with Banking Circular 255, setting forth the criteria under which renewals of extensions of credit may be approved. At a minimum the policy shall:
(i) ensure that renewals are not made for the sole purpose of reducing the volume of loan delinquencies;
(ii) provide guidelines and limitations on the capitalization of interest;
(iii) provide guidelines and limitations on the use of interest reserves in extensions or renewals including criteria and limitations on the source of funding (borrower, partners, shareholders, guarantors, new debt, etc.); and
(iv) establish criteria to ensure accurate reporting of troubled debt restructurings;
(h) guidelines and limitations on conc...
LENDING POLICY. (1) Within ninety (90) days, the Board shall revise the Bank's written loan policy to implement the specific actions needed to improve the lending policy outlined in the Matters Requiring Board Attention of the December 31, 2007 Report of Examination and any subsequent Report of Examination. Those revisions shall address:
(a) construction inspections and status reports;
(b) loan covenants;
(c) interest reserves; and
(d) curtailment requirements for home construction loans.
(2) Within ninety (90) days, the Board shall revise its concentrations of credit policy to include, at a minimum, approved concentrations and limits for those concentrations.
(3) Prior to adoption, the revised policies shall be forwarded to the Assistant Deputy Comptroller for review and written determination of no supervisory objection.
(4) Upon receipt of the written determination of no supervisory objection, the policies shall be adopted and implemented and the Board shall thereafter ensure adherence to the policies.
(5) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies revised pursuant to this Article.
LENDING POLICY. (1) Within ninety (90) days, the Board shall review and revise the Bank's written loan policy. In revising this policy, the Board shall refer to “Loan Portfolio Management” booklet of the Comptroller’s Handbook. This policy shall incorporate, but not necessarily be limited to, the following:
(a) a provision that current and satisfactory credit information will be obtained and maintained on each borrower;
(b) maximum ratio of loan value to appraised value or acquisition costs of collateral securing the loan, which limits will not exceed supervisory loan-to- value limits ;
(c) distribution of loans by category;
(d) guidelines and limitations on concentrations of credit;
(e) a limitation on the type and size of loans that may be made by loan officers without prior approval by the Board or a committee established by the Board for this purpose;
(f) measures to correct the deficiencies in the Bank's lending procedures noted in any Report of Examination including, but not limited to, participations, concentrations limits, and other real estate owned;
(g) requirement that all credits which deviate from the Bank’s normal course of business, including all credits which deviate from the Bank’s written Loan Policy receive the prior approval of the Board, or a committee thereof;
(h) guidelines for periodic review of the Bank's adherence to the revised lending policy; and
(i) guidelines for the periodic aggregation and review of loans granted in exception to the loan policy.
(2) Upon adoption, the policy shall be implemented, the Board shall thereafter ensure Bank adherence to the policy, and a copy of the policy shall be forwarded to the Assistant Deputy Comptroller for review.
(3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policy developed pursuant to this Article.