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#12500 - 12/14/01 01:45 PM Limiting your e-lending footprint?
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,007
Toano, VA
Why and how do you limit the effective lending territory serviced by your WWW credit application forms?
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#12501 - 12/14/01 02:20 PM Re: Limiting your e-lending footprint?
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,408
Cape Cod
Why?

  • Because we choose not to aggressively lend in areas far removed from our service area. As a Massachusetts bank, we don't need to lend in Ashtabula, Ohio, to customers whom we will never really know. We want most of our loans made to people in our CRA designated area.
  • Because we don't want to worry about receiving applications that we will have to turn down for being "out of area" and the attendant need for adverse action notices.

How?

We get location information (ZIP code) up front in the process of filling out the WWW application. If the ZIP provided doesn't fall in our lending area, the process is cut off, the inquiring party is told (in the kindest of ways, of course) that we don't lend outside our territory, and we never receive a completed application.

We got this idea from a bank Web-site guru who shall remain nameless, (except to say he started this thread).

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#12502 - 12/14/01 04:24 PM Re: Limiting your e-lending footprint?
complyguy Offline
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complyguy
Joined: May 2001
Posts: 494
PA
We do not accept on-line applications from outside our assessment area, and we state this at the beginning of our on-line app. We are a small rural bank. In the past two years, our % of loans originated inside our AA has declined due to a higher volume from auto dealers who draw applicants from outside our AA, and we don't want to risk adding to this trend.

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#12503 - 12/15/01 05:22 AM Re: Limiting your e-lending footprint?
MoneyMaker Offline

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MoneyMaker
Joined: Dec 2000
Posts: 215
Atlanta, GA USA
Sounds like great answers to the question. Thanks for the response.

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#12504 - 12/14/01 06:13 PM Re: Limiting your e-lending footprint?
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,007
Toano, VA
Any other reasons why out-of-area lending is discouraged or declined? CRA is a good one, but there must be others, too.
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#12505 - 12/14/01 07:41 PM Re: Limiting your e-lending footprint?
Ted Dreyer Offline
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Ted Dreyer
Joined: Apr 2001
Posts: 2,245
Richard: Unusual state laws like Texas Home Equity should scare anyone unfamiliar with the requirements.

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This is a personal observation that should not be taken as legal advice nor relied upon for any purpose.


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#12506 - 12/15/01 05:32 AM Re: Limiting your e-lending footprint?
Andy_Z Offline
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Andy_Z
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On the Net
Ted, it scares the ones familiar with it too.

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Opinions stated are not necessarily that of my employer.

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#12507 - 01/07/02 11:51 PM Re: Limiting your e-lending footprint?
Anonymous
Unregistered

Another factor is the increased cost of collecting on the debt if the borrower defaults. If you have to chase down collateral (such as a car or boat, for example) in another state, it can be time-consuming and expensive.

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