10 appropriate instances, the applicant would be offered a smaller loan or a loan on different terms.7 Applications for consumer loans that were approved were generally closed in the branch where the loan application was taken. Closing included, among other things, the prospective borrower's execution of a note or other evidence of indebtedness, the prospective borrower's execution of a security agreement or other document conveying a security interest in collateral where appropriate, the delivery of those documents to the banks and, on the part of the banks, some act making the loan proceeds available or, in the case of a new line of credit, some act memorializing the banks' agreements to disburse funds on demand. The banks recorded the documents necessary to perfect a security interest in collateral where appropriate. The prospective borrower could decide not to enter into a loan transaction at any time prior to closing. Similarly, the banks could decide not to enter into a loan transaction at any time prior to closing, except where they had entered into a loan commitment with the prospective borrower. The banks generally did not charge fees in connection with consumer loans because of competitive factors.8 7In some instances, credit was approved in an amount greater than that sought in the application, and the appropriate platform employee was encouraged to "upsell" the loan to the prospective borrower. 8The term "fees" refers to amounts paid by the borrower in connection with the loan origination process. The term "costs" refers to expenses incurred by the banks.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011