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 Gardinerno 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 $10,000no 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 ABOVE POLICY

Scenario One: Dr. Anne Appleton (827 credit score- age 59) is a Ph.D. nutritionist at the University of Maine at Augusta. She has been teaching in the UMA Nursing program for 12 years. Dr. Appleton has a net worth of $77,000. Professor Appleton is a resident of Hallowell (same address for 11 years). She is requesting to borrow $5,000 at 8.50% APR for a 24 month loan term (which you calculate to a $227 proposed monthly payment) for a personal loan using the proceeds to take a summer vacation (airfare, rental car, etc.) to visit her brother in Sacramento, California. Dr. Appleton was unable to visit the loan office in person due to COVID-19 restrictions and mailed in a signed Youma Bank & Trust loan application form. In that form Dr. Appleton lists these items as part of her monthly debt category: $1,500 (mortgage), $455 (auto loan), $259 (student loan), $88 (YMCA monthly bill), Central Maine Power monthly electric bill ($99.97) and $44.45 (Hallowell Sewer & Water monthly utility bill). She lists her annual gross income as $69,750.

1. What is her monthly gross income? ______________
2. What is the total of her monthly debt? (the figure you need to correctly calculate her Debt-to-Income Ratio) $_________
3. Please calculate an accurate debt to income ratio with the new/proposed payment based on your knowledge gained in BUA216: ___________%
4. What is your loan decision? APPROVED DENIED

Using 2 of the 5 Cs of Credit, briefly explain your loan decision: