We are in IL and a customer has e-mailed in a request for money for an LLC he owns with someone else (no application, no ID number, etc.)for a loan on property in California. My lender wants to deny the request because the property is in CA. Our loan policy states "It is permissible to lend outside of our "normal trade area" when there is an existing client/bank relationship or other logical business purpose." We don't want to make the loan, but I don't want this phrase in the policy to come back and haunt us. Also, if we deny it, I don't have a TIN for the LLC for AAN because an application was not completed (which is why we have to send AAN because we have no financial information for the LLC). What do do?????

It isn't discriminatory. So there is no legal prohibition. The "other logical business purpose" is a subjective term added so you could do a deal if you wanted.

Assuming there is no relationship and not much prospect of more than the loan, I'd deny it and move on. In today's lending climate I can't see a reasonable criticism over an incomplete app on a loan in an area you are not familiar with or growing toward. (Assuming these are correct facts.)

Your assumptions are correct. Thanks for the information.