We have backing lines attached to our Letters of Credit. Most of our backing lines are secured however, the letters of credit are unsecured. We have been told by our core vendor we must attach a backing line. Questions is, do we report the backing lines that are secured based on the collateral when reporting the call report code or do we report in 4A with the Letter of Credit that is unsecured? We haven't found any definitive answers but we want to make sure we are reporting correctly.
What are some best practices for tracking auto-renewal letters of credit?
Please explain the precautions which should be used when issuing a transferable letter of credit.
What are some common credit exceptions that banks track with ticklers?
Should we use a spreadsheet or software to track exceptions?
Are automated ticklers worth the money?
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.
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?
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'?
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?