# Reschedule CU loan



## AlbacoreA (3 Apr 2014)

Is it a common policy that if you reschedule a loan, and reduce the loan by using shares, that you can't do any further rescheduling, or indeed any loans until the the new loan is fully paid off.


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## Crugers (22 Apr 2014)

AlbacoreA said:


> *Is it a common policy* that if you reschedule a loan, and reduce the loan by using shares, that you can't do any further rescheduling, or indeed any loans until the the new loan is fully paid off.



*Short answer YES!*

Long answer... it depends on the policy in the individual credit Union which are governed by [FONT=&quot]Section 35 – Regulatory Requirements for Credit Unions[/FONT]  from the Central Bank of Ireland which defines [FONT=&quot]Rescheduled Loans [/FONT]as
_...those loans where the repayment conditions have been altered by the credit union so that:
(1) the duration of the loan is extended; or
(2) the repayment amounts have been reduced for 4 or more months within the period of the loan;
and the loan was in arrears at the time of the repayment conditions being altered, or the loan would have fallen into arrears if the repayment conditions were not altered because the terms of the original loan agreement would no longer be met._

and the regulations read:
2. Lending Practices for Rescheduled Loans

[FONT=&quot]2.1 Loans must only be rescheduled following a thorough credit assessment, supported by sufficient evidence, where the credit union has clearly established the ability of the member to repay in accordance with the revised terms of the loan.[/FONT][FONT=&quot]
2.2 The credit union must require a borrower to submit an application to reschedule a loan. The application must be accompanied by the member’s written consent to reschedule the loan and evidence of the change in the member’s circumstances.
2.3 Loans must only be rescheduled with the agreement of the member and where relevant, the guarantor. A new credit agreement3 must be drawn up and the member must be made aware of any changes to the information contained in the original credit agreement, including changes to the cost of credit.
2.4 The new repayment schedule put in place for all rescheduled loans must not be less frequent than quarterly.
*2.5* Subject to 2.6, a credit union must not approve further agreements for additional credit where an existing loan has been rescheduled.
*2.6* Where a member’s ability to repay all credit owed and the proposed additional credit has been clearly established, the credit union may determine it prudent to grant additional credit to a member with a rescheduled loan where that rescheduled loan has performed in accordance with the new terms for an appropriate period, in mostcases4 not less than one year.
The provision held against the rescheduled loan must remain.
Any additional credit granted to a member with a rescheduled loan that has performed in accordance with its terms for a period of less than one year must be approved by the board of directors of the credit union and the rationale for extending such additional credit must be clearly documented.
2.7 Where a member’s rescheduled loan has not performed in accordance with its terms for a period of at least one year, and where a member’s ability to repay all credit owed and the proposed additional credit has been clearly established, in limited circumstances if the credit union considers it necessary, the credit union may grant small amounts of credit (maximum of €1,000 per member) to such members to cover exceptional expenses only. Any additional credit granted in these circumstances must be approved by the board and the rationale for extending such credit clearly documented. The maximum exposure limit for gross loans outstanding of this type at any one time is the higher of €5,000 or 0.5 per cent of the Total Regulatory Reserve (as defined in the Credit Union Act 1997 (Section 85) Rules 2009).[/FONT]


3 Which complies with all legal requirements including S.I. No. 281 of 2010 European Communities (Consumer Credit Agreements) Regulations 2010. This includes Regulation 11which contains obligations on creditworthiness assessment.
4 Of the total number of cases where a credit union has granted additional credit following the rescheduling of a loan, at least 90% of the rescheduled loans should have performed for a period of at least one year before the additional credit was granted. Where additional credit is being granted to a member with a rescheduled loan that has performed for less than one year, the rescheduled loan should have performed for a period of at least 9 months before the credit union considers granting additional credit


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## AlbacoreA (22 Apr 2014)

ok thanks


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## WizardDr (22 Apr 2014)

And if you borrow from a registered or unregistered money lender at huge interest rates, none of this applies.

Great country isn't it?

But this isn't encouraging money lenders is it? Nah! Just what the military call 'collateral damage'. Hit the the target and wipe out the civilian population. Collateral damage sounds good though.


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