Latest Lending - Letter of Credit Topics

Tracking Letters of Credit that Auto-Renew

03/14/2021

What are some best practices for tracking auto-renewal letters of credit?

Transferable Letter of Credit Precautions

10/18/2020

Please explain the precautions which should be used when issuing a transferable letter of credit.

Common credit exceptions

06/11/2017

What are some common credit exceptions that banks track with ticklers?

Document Tracking: Software vs. Spreadsheet

12/04/2016

Should we use a spreadsheet or software to track exceptions?

Automated Ticklers

11/13/2016

Are automated ticklers worth the money?

Commercial Loan if Purpose Rental Income?

07/02/2012

We have a member at our credit union that wishes to increase their home equity line of credit in order to purchase a rental property. The line of credit is on their primary residence, and would remain so. Would this be considered a commercial loan (and therefore require an originator with commercial lending authority), where the purpose would be to provide rental income? Or would it not, considering the actual collateral of the loan is the member's primary residence.

Cross-collateralized LOC Loan

07/05/2010

We are doing a letter of credit loan that is cross-collateralized with the client's real estate loan. Do we need to order a new flood certification for this new loan?

Reporting a Mortgage-Secured Letter of Credit

01/16/2006

We are writing a letter of credit for a bank customer, who will use it for business purposes. The L/C is secured by a 2nd lien on the customer's residence. Are L/Cs CRA reportable, or should this L/C be included in our HMDA LAR? It is unlikely that the customer will ever draw against the L/C, but should we report the total credit available as the amount 'originated'?

Increasing The Loan Amount For A Commercial Customer - New Note?

11/04/2002

If a commercial loan customer had a letter of credit for $1 million as Note 1 and additional funds were approved, would you be required to draft an entirely new Note 2, or simply due an amendment to Note 1?

LOC Refusal Leads to Liability

04/25/2002