Can I get some feedback on how letters of credit are handled? It is my understanding that they should have an expiration date of 1 year but my LOAN OFFICERS insist that they "automatically" extend for one year and each successive year unless we put in writing NOT to extend the letter of credit.

Check your Letter of Credit form. Yours may have standard "auto renewable" working. Ours is the other way around. We have an expiration date (usually one year) and then we add "auto renewal" wording if the officer so chooses, because different situations warrant different maturities. If you know that the customer will need a new L/C every year, it is less labor intensive for you to have the auto renewal. If the L/C is a one-shot deal, take the auto renewal wording out, so there is no chance of the L/C "rolling" over for another year before you get the letter out saying you will not be renewing it.

The Beneficiary also has some 'input' as to whether the letter of credit provided to their benefit, is to mature within 1 yr- 10yrs, etc. In the case of over 1 year, I believe you need to underwrite and price accordingly!!!