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#172568 - 03/23/04 06:28 PM loan secured by checking account???
slloyd Offline
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Joined: May 2003
Posts: 6
Can a loan be secured by a checking account?

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Lending Compliance
#172569 - 03/23/04 07:10 PM Re: loan secured by checking account???
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,393
Galveston, TX
Sure, but not advisable. Too many control issues.
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#172570 - 03/23/04 07:16 PM Re: loan secured by checking account???
redsfan Offline
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redsfan
Joined: Dec 2000
Posts: 3,455
The Pennant Race
The only thing that comes to mind is that the agreement for a checking account says that the funds are available on demand. If you place a hold on some of the funds, they are no longer available on demand.

I agree with Randy, though. Even without any regulatory issues, the control issues are bound to be a nightmare.
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#172571 - 03/24/04 02:57 PM Re: loan secured by checking account???
ldsnanny3 Offline
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ldsnanny3
Joined: Nov 2003
Posts: 205
Georgia
The safest way to secure the loan is to purchase a certificate of deposit with cash from the account and make it come due the same time the loan matures. This is an advantage for the customer because they will get better pricing for their loan if secured by a CD & it will insure that your funds will not be spent before the loan is paid out.

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