At a minimum, your member business loan policy must address the following:

(1) The types of MBL you will make;

(2) Your trade area;

(3) The maximum amount of your assets, in relation to net worth, that you will invest in MBL;

(4) The maximum amount of your assets, in relation to net worth, that you will invest in a given type of MBL;

(5) The maximum amount of your assets, in relation to net worth, that you will loan to a member or associated members, subject to WAC 208-460-070;

(6) The qualifications and experience of personnel (minimum of two years) involved in making and administering the loans;

(7) A requirement for analysis and documentation of the ability of the borrower to repay the loan;

(8) Receipt and periodic updating of financial statements and other documentation, including tax returns;

(9) Documentation sufficient to support each request to extend credit, or increase an existing loan or line of credit, except where the board of directors finds that the required documentation is not generally available for a particular type of loan and states the reasons for those findings in the credit union's written policy. At a minimum, the documentation must include the following:

(a) Balance sheet;

(b) Cash flow analysis;

(c) Income statement;

(d) Tax data;

(e) Analysis of leveraging; and

(f) Comparison with industry average or similar analysis;

(10) Collateral requirements, including:

(a) Loan-to-value ratios;

(b) Determination of value;

(c) Determination of ownership;

(d) Steps to secure various types of collateral; and

(e) How often the credit union will reevaluate the value and marketability of collateral;

(11) The interest rates and maturities of the loans;

(12) General MBL procedures which include:

(a) Loan monitoring;

(b) Servicing and follow-up; and

(c) Collection;

(13) Identification of those individuals prohibited from receiving member business loans; and

(14) Guidelines for purchase and sale of member business loans and loan participations, if the credit union engages in that activity.

The division recognizes that all of the provisions of the policy may not apply to every MBL.