We have a loan officer wanting to offer a consumer revolving LOC with vehicles as collateral. We have never had a loan setup like this before and are trying to figure out which if any disclosures would be necessary - with the exception being regular loan documents, TIL, RBPN.

This would just be your normal open-end credit disclosures.

How are you going to monitor adjusting the line for the annual depreciation of the car?

How do you monitor the borrower doesn't maintain the condition of the vehicle thus it ends up sitting on blocks in the back 40 and your security is worthless yet they continue to draw on the credit line?

What kind of marketing study supports the product?

What risk customers will this product attract?

What will be your cost to open and service this account?


As you may be able to tell I'm not a big fan of this idea.