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#303978 - 01/14/05 02:54 PM Letter of Credits
Anonymous
Unregistered

Iam working on a loan aduit under the Letter of credit section. My question is, what kind of documentation should I be looking for? If some one can help me with a lists of documents that the file should have. Thanks,

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#303979 - 01/15/05 05:55 AM Re: Letter of Credits
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
That depends on how your bank's documents are drafted and whether there is collateral. You will need:

>letter of credit application & agreement(these can be combined into one document)
>note(if not incorporated into the agreement} - this needs to state the interest rate to be paid if the LC is drawn upon.
>copy of the letter of credit issued
>credit approval document with proper signatures for $ amount
>appropriate collateral documents if secured
Is the LC an "evergreen" with annual or other periodic opportunity to issue notice of nonrenewal? If yes, it needs to be set up on a tickler in time for the notice to be issue. Of course, the bank needs to realize that as soon as the notice not to renew is issued,the LC will be drawn upon!
The LC should be set up on loan system to reflect exposure to the bank (off balance sheet item)
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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