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Discounted Employee Loans
Suggestion: I read with interest your response about the ARM program disclosures on employee mortgage loans. I'd like to share our method which is much easier. We write employee loans at market rate and close them that way with the employee. After closing, we give the employee a discount that is good during their employment. This way, we are making and disclosing a fixed rate loan, which is much easier to do correctly. It also enables us to clearly show employees the benefit of the special employee discount.
Answer: You have a great approach. Not only is this easier, it flags the advantages to the employee of staying on the job. Remember, sales techniques (that are not unfair or deceptive) are legal!
Copyright © 2000 Compliance Action. Originally appeared in Compliance Action, Vol. 5, No. 1, 2/00
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