Youma Bank & Trust Consumer Loan Policy Youma Bank & Trust, a fictitious state-chartered bank located on the campus of the University of Maine at Augusta, strives to follow all Maine State and federal banking laws, rules and statutes, including: Federal Reserve Regulations A, B, C, G, M, O, T, V, Z, and BB, the Fair Housing Act and the Maine Banking Code (MRS 9-B). We evaluate all consumer loans in a fair, honest, nondiscriminatory manner, following this written Consumer Loan Policy, granting exceptions to The Policy when allowed. The Bank serves the Credit and Banking Needs of our Loan Service Area: Augusta, Hallowell, Farmingdale and Gardiner, per Community Reinvestment Act or CRA (REG BB) requirements. The Bank strives for the top CRA rating. Youma Bank & Trust serves consumer lending customer applicants with residences in the following Maine cities and towns: Augusta, Hallowell, Farmingdale and Gardiner—no exceptions to this rule. Applicants must have reached the age of 18 to be considered for a loan request without the addition of a qualified co-signer. The co-signer must also meet all the Youma Bank & Trust Consumer Loan Policy guidelines. Applicants must have established a minimum of 1 year (12 months of residence) in at the same address. Exceptions are granted on a case-by-case basis. Individuals that have made a recent move to take a new position or have moved from a rent to a home (mortgage or own outright) may be given consideration if they fall under the 12-month residency minimum. Applicants must have a minimum of 12 months employment with their current employer. Exceptions are granted when the applicant has improved themselves with a recent job change, and the new position is within their established field of expertise or education. The maximum debt-to-income ratio is 40% on a gross monthly income basis. Exceptions are granted on a case-by-case basis, but not to exceed 45%. The minimum FICO credit score is 675--no exceptions. To be considered for consumer credit, the applicant must have had no repossessions in the past 7 years or declared consumer or business bankruptcy in the past 10 years--No exceptions. In real estate loan transactions, the Loan-to-Value Ratio maximum is 80%--no exceptions. There is a minimum down payment of 10% (based on the sale price of the collateral) on all auto, boat, ATV, motorcycle and snowmobile loans. There is a minimum net worth requirement of $10,000—no exceptions. Youma Bank & Trust does not provide loans for mobile homes (with no land, chattel loans) or light aircraft loans for personal, non-commercial use.

Based on the Policy Above:

Scenario Three: Caroline Chen (702 credit score- age 27) is a computer programmer at Gardiner Network Design for the past 10 months. Her former position was with Portland Tech Solutions as a programmer trainee (24 months)—a previous job she had held since her graduation from the University of Southern Maine. The job change was a big promotion (+$45,000/year), with her annual gross income now at $77,000. Her net worth is $10,500. She has rented a duplex apartment in Augusta, Maine from her mother for the past 34 months. Ms. Chen has a simple loan request; a personal loan to pay off her 10-year federal student loan (in full) over a short period of time (12 months). You quote her an APR of 9.99%, with her request to borrow $15,000 for a one-year term—which equals a proposed monthly loan payment of $1,319. Here are her disclosed monthly debts: $499 (auto loan), $900 (rent), and her existing $555 federal student loan payment.

1. What is her monthly gross income? $ ________________
2. What is her monthly debt (the correct figure you will need to calculate her debt to income ratio)? $_________________
3. What is her debt to income ratio for this loan request? __________%
4. What is your loan decision? APPROVED DENIED

Briefly explain your decision, using some of the 5 C’s of Credit: