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