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#1176674 - 05/06/09 01:59 PM CIP for a church
sunshinebanker Offline
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We have had a borrowing relationship with a community church for the past year. Their loan is coming up for renewal (it is 100% cash secured) and going through their docs we are seeing that when the loan was originated we did not have proper CIP verification documents. The only document found was a letter from a church synod stating that this church was part of their synod. They are working on pulling by-laws from church records- but do we need some sort of registration with the state?

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#1176676 - 05/06/09 02:01 PM Re: CIP for a church sunshinebanker
John Burnett Offline
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John Burnett
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Cape Cod
Some churches are corporations or otherwise registered as entities with their states. Check to see if this one is.
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#1176786 - 05/06/09 03:10 PM Re: CIP for a church John Burnett
sunshinebanker Offline
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The lender has stated that they are NOT filed with the state as a corporation. There is no certificate of good standing for this church on record with the state.

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#1177501 - 05/06/09 09:33 PM Re: CIP for a church sunshinebanker
compliancemom Offline
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West TN
Sales tax exemption certificate might work....
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#1178725 - 05/08/09 11:13 AM Re: CIP for a church sunshinebanker
Elwood P. Dowd Offline
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Certainly, this is a CIP issue, but it's a fundamental loan quality issue too. The question for the lender is: "Who is it that you loaned the money to; i.e. who will we sue if we do not get repaid?" Somebody should be really upset that this issue did not surface until the loan was being renewed.

Evidence of affiliation with a particular sect is not evidence of legal existence. You are looking for evidence that they exist in the eyes of government, not the eyes of people with similar beliefs.

Churches are not required to register with the government at any level. Issues like "freedom of religion" and "separation of church and state" would preclude any such requirement.

However, as John noted, entities; e.g. corporations, may be required to register with the state. If the legal entity happens to have a religious theme or purpose that does not make any difference, the entity still has to register.

If the organization is not a legal entity, but claims tax exempt status and tells its supporters their contributions are tax deductible there is a letter from the IRS acknowledging their existence somewhwere...


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#1178728 - 05/08/09 11:24 AM Re: CIP for a church sunshinebanker
rlcarey Online
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Galveston, TX
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#1178990 - 05/08/09 02:07 PM Re: CIP for a church sunshinebanker
Elwood P. Dowd Offline
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Look at the page three of the Tax Guide for Churches and Religious Organizations, Publication 1828. It provides some interesting alternatives; e.g. IRS recognition of tax exempt status or evidence of a "group ruling." It also confirms that regardless of its form of organization, the church would need an EIN. The letter awarding the EIN could qualify as proof of existence for CIP, but it does not resolve the "who is it that owes us the money" question.

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