Yonkers Postal Employees CU   

 

Loan Policy

It is the declared policy of the Yonkers Postal Employees Credit Union to comply with the letter and intent 
of all applicable laws of the NCUA and the State of New York and regulations promulgated there under.  
The policy is specifically intended to include all facets of the granting of credit and making loans, the handling 
and processing of credit applications, credit inquiries, information concerning interest rates, credit terms and 
costs, and all other requirements of the Federal Consumer Credit Protection Act and associated regulations.

 

Members may not be denied credit due to race, creed, gender and religious affiliation or because the applicant 
has, in good faith, exercised any right under the Consumer Protection Act or any similar state law.

 

Office staff of the Yonkers Postal Employees Credit Union will not, in any manner, discourage a member 
from submitting an application for credit.  This credit union will accept and consider an application from 
any member who wishes to submit a request for credit.  Such requests must be in writing.  Verbal requests 
will not be honored.

APPLICANTS

 Credit Union Members may apply for a loan after 6 months of membership in the credit union.

APPLICATION

The person(s) responsible for the authorization of the loan or loans must have inquired into the character, 
capacity to repay, and the credit history of each applicant.  Evidence of this investigation shall be in the form of 
a loan application that will have recorded on it the following information:

  • Date of Application
  • Name of Borrower
  • Street Address
  • Telephone Number
  • Social Security Number
  • Statement of Monthly Income, Expenses, and Indebtedness
  • Purpose of Loan
  • Amount Applied for
  • Authority to Conduct Credit Investigation
  • Members Signature

 

In addition to the loan application, the applicant must submit the most recent pay stub issued and or proof 
of Income.  In the even a co-maker is required, further information will be required.  If the loan is for the 
purpose of an automobile, a proposed bill of sale, and an insurance binder are required.

LOAN APPROVAL PROCESS

Currently, loan applications are reviewed by Loan Officers, who will approve or deny the loan application based 
on the guidelines set forth in this policy.

If the applicant is refinancing their personal loan, they must have paid a minimum of $1000 off the old loan 
and or 6 month interest accrual from the date of the loan.

Applicants may refinance their personal loans without receiving any funds to lower their scheduled payments.

Factors considered include credit history, judgments, collection accounts, charge offs, late payments, and indebtedness, which classify the loan in tier groups A, B, C, D, E.  

Loan Tier

Credit Score Range

Indebtedness Ratio

Credit History  (Charge-Offs/Collections/Bankruptcies)

Past Payment History

Co-maker Required

Approvable

 

 

 

 

 

 

 

Class A

700-850

40% or lower

None

Excellent

N

Yes/ Preferred Rate

Class B

600-699

45% or lower

None

Good

N

Yes/ Preferred Rate

Class C

500-599

45% or lower

Some/But Repaid

Good

Y

Yes but proceed with caution

Class D

400-499

>65%

Collections/Chargeoffs/Bankruptcy

Good

Y

Yes but proceed with caution and with Board approval

Class E

Below 400

> 65%

Collections/Chargeoffs/Bankruptcy

Poor

No

No Bad risk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*****Tier C & D - Member may qualify for a lesser loan amount

 

 

 

 If the loan is approved, it is sent back to the office for final issuance.  If the loan is disapproved, a letter is sent to the applicant with an explanation or reason(s) for disapproval.

The Yonkers Postal Employee’s Credit Union currently uses Experian for applicant’s credit history.  Credit scores are based on the lower number system, however, we are now drawing down the National Risk Model score (lower=better) and the FICA score (higher=better) with the intention of changing to FICA at the end of calendar year 2015.

  • All loans are required to have the mandated security at the time of applying (the amounts for securities are 
    set forth by the board of directors).

***If the applicant is short funds for the additional security (up to a maximum of 500.00), upon approval of the 
loan, the extra collateral will be deducted from the amount the borrower receives from the loan and applied 
toward the security.

Any member who has been in default 3 months or more, will not be allowed to apply for a loan with the Yonkers Postal Employees Credit Union for at least one year after becoming current on the initial default.

 Any member who has previously defaulted on a loan with the Yonkers Postal Employees Credit Union 
(causing it to written off by the credit union), will not be granted credit with the Yonkers Postal Employees 
Credit Union. 

Loan applicants who have a credit score of 250 or less (National Risk Model) or 700 (FICO) do not require a 
co maker. In addition they are eligible for a 2 percent reduced interest rate providing their indebtedness ratio 
is less than 45%.  If the members credit score is 250 or less (NRM) or 700 (FICO) they and their indebtedness 
ration is higher than 45% they do not require a co-maker and be charged that applicable interest rate set forth.

SIGNATURE LOANS

 Signature loans are offered from $700.00 - $37,000 ($35,000 loan portion, $2,000 for insurance) with interest 
rates set by the Board of Directors for terms ranging 12 months to 5 years.  Co-makers are required on loans 
for applicants with a credit score of 251 or higher.  

Any applicants 65 or older must provide proof of life insurance binder naming the Credit Union as beneficiary 
to the amount owed on their loan.  Insurance is not offered to applicants 65 or older through our insurance carrier.

Retiree’s loan will have a payment date of the first of every month.

  • The total amount on any loan is inclusive of applicable insurance.
  • Credit Reports are required for all signature loan applicants.
  • Credit Reports are required for all co-makers (when applicable).

PASSBOOK LOANS

 Passbook loans are granted based on the amount in the applicants share account.  The minimum amount of 
a passbook loan is $500.00.  Interest rates are always 2% higher than the current dividend rate.  
Passbook loans may be granted anytime during regular business hours.

AUTOMOBILE LOANS

The maximum amount granted for New Automobile is $35,000.00 with a maximum repayment period 
of 60 months (5 years).  The maximum amount granted for Used Automobile (not over 5 years old) 
is $25,000.00 with a maximum repayment period of 48 months (4 years).

Applicants may apply for the maximum amount for a new car or used car.   

Applicants will be required to maintain a security deposit of 10% or 3 payments, depending on the 
applicants indebtedness and credit history.  Applicants with a score a 45% or less will not be required 
to have a co-maker. Applicants whose risk factor is greater than 45% are required to have a co-maker.  
These applicants are required to have 10% of the total loan as security (see scoring process). 
These applicants are required to have 3 loan payments as security on their loan.  

Applicants must provide a proposed bill of sale for the vehicle, including the vehicle identification number.  
Applicant must also provide an insurance binder showing the Yonkers Postal Employees Credit Union 
as the additional insured (lien holder).

  • The total amount on any loan is exclusive of applicable insurance
  • Credit Reports are required for all signature loan applicants.
  • Credit Reports are required for all co-makers (when applicable).

 CO-MAKER

Factors considered include credit history, judgments, collection accounts, charge offs, late payments, 
and indebtedness. Co-makers must provide original proof of income been employed at their present 
job for a least 4 years.  Non postal co-makers must submit their current pay stub and the previous years’ W2. 

Spouses of applicants are eligible for consideration as a co-maker (providing they meet the requirements 
previously set forth).

Retirees may be used as co-makers providing they do not have an outstanding loan, are eligible for life 
insurance, and their retirement check is directly deposited into their credit union account.

LOANS TO CREDIT UNION OFFICIALS

 No officer of the Board of Directors, Supervisory Committee, or Loan Officer shall submit a loan application 
unless it is signed by the majority of the credit union officials.  The rate of interest of any such loan shall be 
equal to the current posted rate of interest.

NON PAY STATUS/DEFAULTS

 If a member with an outstanding personal or automobile loan enters into a non-pay status and continues 
to make the scheduled payments, the security amount will remain as agreed to on the Loan Disclosure form.  
If a member falls delinquent on their loan, (for non payment) the account will be frozen until such time as 
the member returns into a pay status.

Any member, who decreases their allotment below the payment amount signed off on their loan application, 
will have the entire balance of the loan called by the credit union including interest.

If a borrower becomes delinquent on a loan, the Treasurer will inquire as to the reason for the delinquency.  
Written demand for payment will be initiated by the Treasurer.  If collection efforts are not successful, further 
contact will be made through the credit union’s attorney.

In the event there is a co-maker on the loan, the co-makers will be apprised of the delinquency status and 
of our intention to collect the outstanding amount.  In many instances, the co-maker will be required to 
increase their allotment to cover the additional loan payment.

In the case of an automobile loan, arrangements will be made to repossess the car if payment is not made.  
Loans which become delinquent for more than 6 months will be charged off and reported to the credit bureau.                            

                 SCORING PROCESS

To obtain the borrowers score, divide the annual salary by 12 (months) to determine the gross monthly 
income.  Obtain the amount of indebtedness. Take the total indebtedness and divide by the gross monthly income. 

                                    

Reviewed/Approved by Board of Director’s  - December 4, 2015

Randolph Lane, President
Islah Abdul- Halim, Vice President
Peter Pagano, Treasurer 

Ginger R. Watkins, Secretary

Veronica J. McBryde, Officer-at-Large

Revised   12/4/15

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