Advisories
Advisory 9
System Credit Committee - Group Borrowing Limits
Member's Life & Disability Insurance Premiums
While conducting recent Loan Reviews, instances
have been noted whereby credit unions are approving
loans which brings the aggregate total borrowings
up to the credit union's Group Borrowing Limit for
System Credit Committee (SCC) purposes. The credit
union then exceeds the Group Borrowing Limit to
finance the cost of insurance premiums without submitting
the application to the SCC for approval.
For clarification purposes, a credit union may
exceed its Group Borrowing Limit or exceed an amount
approved by the (SCC) to finance the costs of its
member's life & disability insurance premiums if
this is the only reason which necessitates it being
sent to the SCC. Therefore, if a loan causes the
Group Borrowing Limit to be exceeded as a result
of financing life or disability insurance premiums,
then that application does not have to be submitted
to the SCC for approval. Also, if an approval is
received from the SCC which does not include the
premiums, the credit union may add the cost of the
premiums to the loan without needing to resubmit
it to the SCC.
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