Credit Control Policy

Transcription

1 Credit Control Policy This policy was adopted by the Board of Directors of Armagh Credit Union Limited. Signed: Position Position Date:

2 Standard Credit Collections Policy Contents: Page 1. Policy Objective 2 2. Definition of Loan Arrears 2 3. Credit Control Objectives Governance in Credit Control 3 5. Arrears Monitoring and Management Member Repayment 5 7. Change of Loan Agreement Terms Credit Control Operational Issues Accounting Taking Legal Action Review of Credit Control Policy Appendix 1: Summary of procedures Appendix 2: Monthly reports to the Board Appendix 3 - Summary Operational Policy Appendix 4 - Sample Credit Control Letters Policy Objective The purpose of this document is to explain how the Board of Directors will control and manage the collection of loans in arrears. In addition this document will give all officers involved in the collection of loans, clear policy direction. The Board will ensure that adequate resources are allocated to the credit control function at all times. 2.0 Definition of Loan Arrears This policy defines loan arrears as any default from the agreed repayment schedule as laid out in the Promissory Note between the member and the credit union. Therefore, in respect of any loan in arrears the credit collections process must begin immediately. 3.0 Credit Control Objectives To minimise the risk to loan assets by adopting a quick and intelligent response to loan arrears. To minimise loan arrears and aim not to exceed 10% of the total loans as set out by the Board of Directors.

3 To have the Credit Control Committee use the Collections Reporting Template in Appendix 1 so that the Board of Directors are fully aware of the loan arrears situation at each Board meeting. To ensure that all members in arrears are notified in a standard and timely manner about their arrears and are given the same opportunities to make good their debts. To ensure that all members are treated with dignity and that individual circumstances are taken into account when complying with this policy 4.0 Governance in Credit Control 4.1 Board of Directors Responsibility for Credit Collection The collective members of the board of directors are ultimately responsible for the entire credit collection function of the credit union. The Board recognises that the quality of each loan granted is important and affects the overall safety and soundness of the credit union. To this end the Lending Policy and the Credit Collection Policy complement one another. 4.2 Credit Control Committee The Committee shall consist of a least three persons, one of whom shall be a director. The purpose of the credit control committee is to seek to ensure the repayment of loans by members in accordance with their loan agreements. The committee will meet for this purpose as often as required and at least monthly. The committee shall also submit a written report to the Board of Directors at each meeting of the Board. The form of the report to the Board shall be as outlined in Appendix 1 of this Policy. The committee shall also comply with any instructions of the Board of Directors. The amount of operational work the committee will have to do will depend on the extent of arrears and the staff resources dedicated to credit control in our credit union. 4.3 Reporting to the Board of Directors This policy requires that the Board of Directors must at every board meeting receive a written report from the credit control committee that will show that credit control work is occurring on a consistent basis and that the work is effective in controlling loan arrears. A template for this Monthly Report to the Board is contained in Appendix Compliance with Legislation and Regulation The Board of Directors continuously monitors the credit unions credit control function to ensure that it complies with legislation, regulatory requirements and this policy. 4.5 Data Protection Armagh credit union will ensure that it adheres to data protection legislation and its key principles when conducting credit control work. 4.6 Fair Treatment This credit union ensures that its credit control actions are fair, proportionate and respectful of the borrower. Our assumption, unless proven otherwise, is that the member cannot repay and our objective is to assist in any way we can. We will not take legal action against a borrower unless we believe that he or she can afford to repay but is unwilling to do so.

4 5.0 Arrears Monitoring and Management 5.1 Guarantors Guarantors must be communicated with once the borrower defaults on loan repayments. They should also be reminded that their shares will be at risk if the borrower does not resume repayments. 5.2 Solicitors Letters of Undertaking Where a solicitor s letter of undertaking has been used to secure a loan the undertaking must be followed up at least every six months and monthly/bi-monthly with undertakings involving the sale of a house. In following up the solicitor should be written to and asked for a detailed update on the undertaking. Details of all correspondence and phone calls with the solicitor should be carefully recorded. Where correspondence is being ignored the solicitor should be put on notice that if the credit union is not updated on the status of the undertaking the credit union may have to refer the matter to the Law Society. The manager will provide monthly reports to the Board in respect of all undertakings. 5.3 Promissory Note All members borrowing from the credit union must complete a Promissory Note. Before any legal proceedings begin on any loan account the Promissory Note should be checked to make sure it is in order. 5.4 Monitoring Our Credit Control System provides an aged list of accounts that are in arrears of principle and interest. This list is monitored constantly, with the focus being on the following: Loans appearing in the early stages of arrears (first payment missed) Loans where the arrears position is deteriorating No Shows- where the member is making no payment at all 5.5 Other Indicators Of Potential Problems In addition to the IT system, credit union staff are instructed to be vigilant for formal or informal signals that a member might be getting into difficulties. Where the recipient has reasonable grounds for believing that the information is correct, he or she should note it on the Credit Control system and /or member file. 5.6 Contact With Borrowers Early stage arrears are managed by a series of letters, phone calls and maybe visits. Every contact is used as an opportunity to ensure that the details we hold on the borrower are up to date and to amend them as necessary. A written record of all contacts is maintained on the computer system and/or in the member s file. As a general principle, we try to use every contact to encourage the borrower to engage (or continue to engage) with us and to make it as easy as possible for him or her to do so. The sequence and timescales can vary on a case by case basis but generally are as detailed in Appendix 2. All officers are aware of and adhere to the relevant Data Protection requirements. A member is deemed to have responded when he or she contacts the credit union and either makes a reasonable payment or comes to a formal agreement with the credit union. Whether a payment is deemed reasonable depends on the circumstances of the case and on the perceived ability of the borrower to repay. At any stage, the Credit Control Committee may recommend a visit to the member s residence.

5 5.7 Contact With Borrowers Visits. Our aim is to minimise the number of visits to borrowers homes. Where they are deemed necessary, they are carried out as discretely as possible. Officers should take the opportunity to form an impression of the borrower s financial circumstances. 5.8 Contacts With Borrowers Telephone Calls. The objectives of the call are: To ensure that our member data is accurate and up to date; To ascertain the reason/s for the arrears; To get a commitment from the borrower to deal with the issue; To ensure that the borrower is aware of what he or she has to do to resolve the problem. Some of the key aspects of the call are as follows: The officer must ensure that he or she is speaking to the borrower; The officer must check that we have the correct information on our system, particularly with regard to contact details and employment; If for any reason the borrower is unable to call to the credit union, he or she should be encouraged to set up a Standing Order. 5.9 Savings No withdrawal of savings will be permitted where a member is in arrears, other than in exceptional circumstances and with the approval of the credit committee. 6.0 Member Repayment 6.1 Loan repayments by members Members must make loan repayments as set out in their Promissory Note. 6.2 Standing Orders Where the member has a bank account, he or she should be encouraged to complete a Standing Order mandate when a loan is first issued. 6.3 Family members Depending on the relationship between family members, if the loan for the principal earner of the family goes into arrears, other family accounts may need to be monitored and the credit control officers needs to remain objective at all times with such accounts. 7.0 Change of Loan Agreement Terms 7.1 Re-financing/Top-ups All re-financing loans should be reviewed after 6 weeks. 7.2 Reduced terms Loan reduced terms is the process by which the borrower s agreed payments are reduced, thereby extending the term of the loan. No additional funds are granted. Reduced terms may be facilitated where a borrower s financial circumstances have changed or are expected to change and where it is the only option available to the borrower to get or maintain his or her loan account in order. Reduced terms is only done at the request of the member and is never used to purposely conceal or mask loan delinquency.

6 Requests for reduced terms are assessed by the Credit Committee (in consultation with lenders), using the same criteria as new loan applications. The borrower should attend in person at the credit union office. The Credit Committee must satisfy itself that is has sufficient up to date information to ensure that the member can keep to the revised agreement. The Credit Control Committee must make a judgement in each rescheduled case as to the level of bad debt provision required for the loan. At a minimum, any provision currently held on the loan is retained until it is certain that the member can adhere to the revised agreement. All rescheduled loans are recorded in the Rescheduled Loan Book and/or flagged on the computer system as rescheduled for the remainder of the loan term. Rescheduled loans are closely monitored for default. An immediate and advanced level of credit control action must take place when a rescheduled loan defaults and the level of provisioning must be reviewed. Reduced terms of a loan can only take place for a maximum of 6 weeks. All reduced loans are monitored, and after 6 weeks the member must go back to the original payment schedule. The member may reapply to the Credit Committee for an extension of the above period which may or may not be granted, subject to the discretion of the said committee. A member cannot be paid the annual dividend and/or interest rebate if he/she has rescheduled their loan within a 6 month period prior to the Annual General Meeting. 7.3 Write-offs Loan write- off requires an objective judgement to be made on the quality of a loan asset and should be made by the Board of Directors following a recommendation by the credit control committee to the Board of Directors. However, before a loan is recommended for write off the following should have taken place: There must be a record of written correspondence and telephone communication with the member. A visit to the members home may have to be been arranged. The account should have been referred for legal action. The Board of Directors must sanction any loan write offs at a board meeting and have these loans recorded in the minutes. A detailed record of written off loans must be recorded. It is preferable that written off loans be kept on the computer system where they can be accessed easily but they must not form part of the live loan listing under separate control. Where legal action has begun both telephone and written communication should be maintained with the member throughout, explaining the implications of legal action to the member and encouraging him or her to engage with the credit union, thereby potentially stalling legal action. A loan should be written off once all the above stages have been thoroughly exhausted. The loan should be written off on the computer system the day following the Board of Directors meeting. Loan interest will stop accruing when the account has been written off on the system. In some exceptional cases where it is clear at an early stage that a loan is a definite write off, then the preceding steps may not be necessary or practical and the loan should be written off immediately.

7 In some exceptional cases where it is clear at an early stage that a loan is a definite write off, then the preceding steps may not be necessary or practical and the loan should be written off immediately with the Board's approval. Writing off a loan does not mean that the debt cannot be collected in the future; the member owes the debt until it is paid off or the member has become bankrupt or the Credit Union has acknowledged the debt in an IVA arrangement. The credit union must therefore periodically review written off cases and continue to pursue them where appropriate. A monthly report must be given to the Board. The member must not be told that the loan has been written off. The Credit Bureau will be updated monthly on all loans including written off and underperforming loans. 8.0 Credit Control Operational Issues 8.1 Credit Collections Structure The ideal credit collections structure should have all the resources required to do the job efficiently and effectively. The credit control function will carry out its work independent of the lending function of the credit union at all times. This is not to suggest that discussions should not take place between both functions when appropriate. There should be dedicated staff to carry out credit collection work. The roles and responsibilities of the credit control committee and credit control staff should be set out clearly. Members should be able to communicate with the credit collection section directly and without delay. This eliminates members making excuses in relation to not being able to contact credit control. The credit control officers will have access to detailed member information on the computer system. Additionally, credit control officers will be trained on the use of the computer system and its full capabilities in regard to credit collections. Software suppliers will be contacted if additional reports are required. 8.2 Arrears Priority Loan application forms should be input to the computer system by the staff responsible for this so that contact data in relation to the member is kept updated. The arrears are categorized as follows: arrears cleared at month end arrears reduced in the month arrears un-changed in the month > new entrants in the month

8 new entrants re: timing issues Each month, one of the above categories is targeted and measured by the Credit Control committee. No show reports should never be used solely to direct the loan arrears work. They should only be used in conjunction with other arrears reports. 8.3 Loan Monitoring of Loan not in arrears. The top 50 largest loans will be monitored monthly with a written report given to the Board. Annually, a report will be given to the Board on an analysis of the arrears with the bad debt provision reviewed monthly. The purpose of loan monitoring is to detect early account problems and to lessen loan losses through loan reduced terms and early provisioning. Loan monitoring will also highlight poor quality loans for write off and provide feedback to lenders. 8.4 Arrears Measurement, Statistics and Goals Loan arrears must be measured with the goal is to keep loan arrears to a minimum and not exceed the 10% norm. A copy of the arrears summary is to be printed off and filed in the credit union at least monthly. A copy should be provided at each Board meeting. The figure for gross loans outstanding on the Balance Sheet at the same date as the arrears should also be recorded for the purpose of calculating the ratio. 8.5 Monitoring the performance via the Collections Reporting Template A written loan arrears report must be prepared for each board meeting. The report must contain the following information: Summary of other credit control work carried out last month (Letters & Visits) Current status on accounts for legal action List of loans for write off and cumulative balance of write-offs to date. Adequacy of the bad debt provision to Provision required by the FCA Most current arrears summary report See Appendix 2 for full list. 8.6 Arrears Letters and Telephone Contact The recommended process is as follows: Members must be contacted by phone if this is feasible and through limited lettering. Telephone contact is a very effective collection technique and it should be used (if feasible) in combination with lettering. If lettering (and phoning if feasible) does not correct the arrears then a visit by a credit union representative may be made to meet the member. Following this legal action may commence. Once legal action begins the case must be followed through where it is economic to do so. Communication by phone with the member (if feasible) should be continued throughout the legal process to try to broker a deal as many members are not familiar with the legal process and its implications. Legal action may be initiated at any stage in the recovery process, e.g. where the member has previously been through the process and has gone into arrears again, or where the member refuses to respond at any stage of the recommended process, or where it is not possible to recover the debt in any other way.

9 9.0 Accounting 9.1 Bad debt provisioning The bad debt provision must be a minimum 100% of the FCA requirements following an allocation to the reserve at month-end. The credit union can maintain provisions in excess of the FCA bad debts requirement if this is deemed necessary. It is good practice that loan provision adequacy be checked monthly and additional provisions are made from surpluses where in the opinion of the Board this is necessary. It is our policy to make monthly transfers to the provision to keep it up to date. 9.2 Loan interest Income The figure for loan interest income must be based on the actual loan interest funds collected i.e. on a cash receipts basis from the 1st of Oct to the 30 Sept in any financial year. There must be no accruing of loan interest income. Loan arrears are calculated as the principle arrears plus the interest arrears. 9.3 Bad debts write off Once a loan has been identified as having no asset value then the loan should be written off immediately. Normally, a loan should be held for a year where no principal payment has been, before a decision for write off is made. The Board should make loan write off decisions when recommended by the credit control committee at each meeting of the Board if necessary. A cumulative report of loans written off must be made to the Board at each Board meeting. Written off loans should be kept on the computer but should not form part of the live loans on the computer system. Written off loans should be reviewed monthly. A member whose loan has been written off still owes that loan to the credit union and making a write off decision does not interfere with the credit union s ability to collect that loan in the future, subject to an IVA or bankruptcy.(see 7.3 earlier) 9.4 Bad debt recovery Written off bad debts that are recovered shall be recorded as income in the financial year it is recovered Taking Legal Action 10.1 Taking Legal Action The legal steps to be followed should be agreed and documented with the credit unions legal advisors to ensure that mistakes are not made during the process Judgement Options There are a number of judgement options that can be followed once judgement has been obtained against a member. The cost of implementing these options varies and some are more cost effective than others. The credit union should have its legal advisors fully explain all the options available and the cost of implementing these options. The chosen option should be the one most effective for our credit union Transferring Shares

10 Before a case goes to court the shares should be transferred to reduce the loan balance outstanding. However the credit union can keep an amount of shares on the account to cover its legal cost. The Credit union is obliged to keep its cost to a minimum. The credit union should also have informed the member in its credit control lettering that whenever legal action is taken against him / her that he / she is liable to pay the costs of such actions Authorised to attend Court Anyone of the following: Credit Control Officer Manager Assistant Manager Credit Union Staff 10.5 Last minute check before attending Court The person due to attend Court should check the loan balance outstanding on the members account personally as late as possible to ensure the member has not made a late payment Review of Credit Control Policy This policy will be reviewed by the Credit Control Committee on a regular basis, but at least annually. This review will be signed off by the Board of Directors at the monthly meeting following the review Monthly Report to the Board of Directors See Appendix Summary Operational Policy (Letters/ Procedures) See Appendix Sample Letters See Appendix 3

11 Appendix 1: The Credit Control daily routine is as follows: First thing in the morning log in: On the credit control screen there is a list of members who needs letters. We either send out letters or leave them for a phone call later that day. We find that the phone call is more effective with a more immediate response. Letters There is a number of stages we would go through because of the different types of letters to be sent out. Letter 1 Friendly reminder (approx. 10 per day) Visit/phone call (Approx. 20 per day) Letter 2 which is blue note threatening legal proceedings Solicitor letter Even when they are at Solicitors we would still try to contact the member and guarantor by phone. Other than the standard letters we may also send an adhoc letter or phone calls. The adhoc letter can be a letter regarding historical missed or reduced payments. At least once a week we produce another report that highlights members that should be in Credit Control but are not. The main reason is that, although they have not paid in a number of weeks they are pre-paid. We add these to Credit Control and sent the relevant letter or phone call. Appendix 2: Monthly Report to the Board of Directors

12 Loan provisions Bad debt provision Operations Number of Accounts in Arrears Number of letters sent this month Number of phone calls made this month Number of meetings with members Loan rescheduling and loan top-ups Number of loans in arrears that were rescheduled this month Number of loans rescheduled this year to date Loans top-up this month Loans top-up this year to date Recoveries Amount recovered this month Amount recovered this year to date Accounts with Solicitors Number of accounts referred to solicitor this mouth Number of accounts refereed to solicitors this year to date Number of accounts with Judgement this month Number of accounts with Judgement this year to date Other loans with difficulties Comment on any loan not in arrears but which may go bad Stubbs Gazette/Experian, member whose name has appeared recently Loan arrears situation Comment of overall loan arrears situation Short term work plan for next month Long term work plan over the year Top 50 Loans situation Comment on the situation regarding the top 50 loans Loans recommended to be written-off Provide a summary of any loans to be written-off, e.g. Include original loan value, monthly/weekly repayment, previous history of member, when loan started to go bad, state reason for default, amount outstanding, possible ways to recover outstanding amount, and recommended course of action. Appendix 3: Summary Operational Policy (Letters, Procedures)

13 The Committee will be responsible for the monitoring of all accounts which have fallen into arrears due to non-payments and reduced payments. The Committee will review a weekly arrears report and send the appropriate letters as listed. In the case of weekly/fortnightly/monthly accounts, action will be taken 2 weeks after a missed payment as follows Letter 1 is sent After a further 1 week Letter 2 is sent After a further 1 week Letter 3 is sent A phone call may also be made If the member does not respond a phone call is made to the member and a home visit may apply The Blue Note is sent if no response After a further 10 days If contact can not be made with the member, letter 8 is sent (i.e. the start of legal action) Shares In Excess Accounts After 6 weeks missed Shares-in-Excess Letter 1 is sent (Letter 6) Where a Guarantor is involved a copy of all letters must be sent to the Guarantor informing them of the missed payments. The member shall be advised in their letter that a copy is being sent to their Guarantor Once an account is classified as Delinquent, then the following steps will be taken: 1. A Blue note is sent to the members and a copy to the Guarantor if applicable. 2. A home visit should be made at this stage to ascertain the member s ability to repay. 3. If no payment has been received within the following 10 days then Legal Action may be instituted either through the Small Claims Court or through the Solicitor. Accounts in Arrears: Accounts which are paying regularly, but have amassed large arrears, require special letters (Letters 4 & 5) to be sent requesting the member to call to the office to discuss a new agreement. These members will also receive a phone call. Monthly Report: The Director should submit a monthly report to the Board of Directors indicating the activities during the month. (Number & Type of letters sent, home visits made, amount of bad debt and legal fees recovered, number sent to Small Claims Court/Solicitor, number of accounts written off (if applicable), arrears summary for the previous month end.

14 The Credit Control committee should provide a written report to the Board each month, with a total arrears count in September each year. Account for Write Off: The Director should present a list of proposed accounts for write off to the Board of Directors in September each year (or during the year if required). The Manager/Assistant Manager will meet at least once each week with the Credit Control Officer to discuss a progress report on all credit control issues. NB: Credit Control Staff, following discussion with the Manager and Director for Credit Control, will use their discretion at all times, given their knowledge of members history of payments/circumstances. In these cases, action will be suspended and recorded in the credit control system. Appendix 4: Letters Letter 1a Re: Dear??

15 our records indicate that you have not made a repayment off your leans in recent weeks. I presume that this is due to an oversight on your part and trust that this letter will prompt you to resume payments. If you have dufficulty in meeting these repayments please contact our office If you have already clears your arrears please disregard this letter Your faithfully, on behalf of the Credit Control Committee Letter 1b Re: Dear????,

16 we have today sent a letter to... in connection with arrears on their loan repayments. We would appreciate your assistance in ensuring that the arrerars are cleared as soon as possible and also that the agreed repayment of... per... is maintained for the duration of the loan. Details of the arrears and current balances are set out bellow for your information. Yours faithfully, On Behalf of the Credit Control Committee. Letter 1c (Without Guarantor) Long-Term Written Off Loans Re: Dear The Credit Control Committee of Armagh Credit Union is reviewing all long-term outstanding loans that have not been repaid.

17 Examination of our records shows that there is outstanding loan balance amounting to and legal fees of. You are now in breach of your loan agreement signed on. Please call to this office within 7 days from the date of this letter to discuss your repayment or the possibility of reduced terms. Failure to respond within 7 days will result in a legal proceedings. Yours On behalf of the Credit Control Committee WARNING: ARREARS MAY AFFECT FUTURE LOANS Letter 1d (With Guarantor) Long-Term Written Off Loans Re: Dear The Credit Control Committee of Armagh Credit Union is reviewing all long-term outstanding loans that have not been repaid.

18 Examination of our records shows that there is outstanding loan balance amounting to and legal fees of. You are now in breach of your loan agreement signed on. Please call to this office within 7 days from the date of this letter to discuss your repayment or the possibility of reduced terms. Failure to respond within 7 days will result in a legal proceedings. A copy of this letter has also been sent to your Guarantor. Yours On behalf of the Credit Control Committee Letter 2c Home Visit (if applicable) Dear This is to confirm that I have called with you today to discuss your outstanding account as you have failed to respond to our previous correspondence of.. It is important that you contact the office immediately. Failure to do so will result in Legal Action being taken.

19 On behalf of the Credit Control Committee WARNING: ARREARS MAY AFFECT FUTURE LOANS Re: Account No. Member s Account Number. Preliminary Notice of Law Process For Recovery of Outstanding Debt

20 To: Member s Name and Addresses NOTICE IS HEREBY GIVEN that unless the sum of Member s Loan Balance & interest due from you to Armagh Credit Union Limited, 3 Russell Street, Armagh be paid within TEN days from date hereof AN ACTION AT LAW will be commenced against you by our Solicitors for recovery of the said sum, together with ALL EXPENSES connected therewith. It is to be hoped you will deem it prudent to pay within the time specified, and thereby avoid the EXPENSES to which you will otherwise be liable. Member s Loan Balance plus interest Dated: Today s Date Re: Account No: Member s Account, Name and Addresses Preliminary Notice of Law Process For Recovery of Outstanding Debt

21 To: Guarantor s Name and Addresses NOTICE IS HEREBY GIVEN that unless the sum of Member s Loan Balance due from you to Armagh Credit Union Limited, 3 Russell Street, Armagh is paid within TEN days from date hereof AN ACTION AT LAW will be commenced against you by our Solicitors for recovery of the said sum, together with ALL EXPENSES connected therewith. It is to be hoped you will deem it prudent to pay within the time specified, and thereby avoid the EXPENSES to which you will otherwise be liable. Member s Loan Balance Dated: Today s Date Letter 4 (a) Special Arrears Letters Missed Payments Dear Examination of your account shows that as a result of missed payments your account is now showing principal arrears of and interest arrears of We would ask that you come into the office to discuss this within the next week. Yours

22 On behalf of the Credit Control Committee WARNING: ARREARS MAY AFFECT FUTURE LOANS Letter 4 (b) Special Arrears Letters Reduced Payments Dear Examination of your account shows that as a result of reduced payments your account is now showing principal arrears of and interest arrears of We would ask that you come into the office to discuss this within the next week. Yours

23 On behalf of the Credit Control Committee WARNING: ARREARS MAY AFFECT FUTURE LOANS Letter 5 Special Arrears Letters Missed & Reduced Payments Dear Examination of your account shows that as a result of missed and reduced payments your account is now showing principal arrears of and interest arrears of We would ask that you come into the office to discuss this within the next week. Yours

24 On behalf of the Credit Control Committee WARNING: ARREARS MAY AFFECT FUTURE LOANS Letter 6 Shares In Excess Letter 1 (aged under 55) Dear In reviewing your account we find that payment is overdue with the result that interest is accumulating. We realise that you have sufficient savings to cover your loan balance but it is in your own best interest to make repayment as promised. We would be grateful if you could come into the Credit Union office to discuss this within the next five working days. Failure to do so will automatically result in your shares being transferred to clear the outstanding principal and interest as per the Promissory Note Agreement.

25 Yours On behalf of the Credit Control Committee WARNING: ARREARS MAY AFFECT FUTURE LOANS Letter 7 Shares In Excess Letter 1 (aged under 55) Dear In reviewing your account we find that payment is overdue with the result that interest is accumulating. We realise that you have sufficient savings to cover your loan balance but it is in your own best interest to make repayment as promised. We would be grateful if you could come into the Credit Union office to discuss this within the next five working days. Failure to do so will automatically result in your shares being transferred to clear the outstanding principal and interest as per the Promissory Note Agreement.

26 By transferring your shares to cover your loan in the event of your untimely death will disadvantage your benefactors to the value of... Yours On behalf of the Credit Control Committee WARNING: ARREARS MAY AFFECT FUTURE LOANS Letter 8.. Forward to Solicitor Solicitor address: Our Ref: Account No. Your Ref: Dear????? I would appreciate if you would write to the above member and inform them that we intend to proceed with Legal Action for recovery of the outstanding debt to Armagh Credit Union for the sum of. Yours faithfully

27 Manager