Closed-End Consumer Lending User Guide - CUNA Mutual Group

ContentsChapter 1: General InformationIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Chapter 2: Consumer Loan and Security Agreements and Disclosure Statement (Paper)Document Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Document Sample and Completion InstructionsTruth in Lending Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-12Itemization of Amount Financed Section . . . . . . . . . . . . . . . . . . . . . . . . . . 12-13Voluntary Payment Protection Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Loan Agreement Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 16-18Security Agreement Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 18-20Chapter 3: Consumer Loan and Security Agreements and Disclosure Statement (Electronic)Document Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Document Sample and Completion InstructionsTruth in Lending Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22-27Itemization of Amount Financed Section . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29Loan Agreement Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 30-33Security Agreement Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34-36Chapter 4: Dwelling Fixed Loan and Security Agreements and Disclosure StatementDocument Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37Document Sample and Completion InstructionsTruth in Lending Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38-41Itemization of Amount Financed Section . . . . . . . . . . . . . . . . . . . . . . . . . . 42-43Loan Agreement Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42, 44-45Security Agreement Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46-48Chapter 5: Dwelling Variable Loan and Security Agreements and Disclosure StatementDocument Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Document Sample and Completion InstructionsTruth in Lending Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50-53Itemization of Amount Financed Section . . . . . . . . . . . . . . . . . . . . . . . . . . 54-55Loan Agreement Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54, 56-60Security Agreement Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61-63Chapter 6: Variable Rate Sample Language . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Chapter 7: Sample LoansRefinance Existing Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69Share Secured Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73Automobile Purchase/Debt Payoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Variable Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81Motorcycle Purchase, Car Given as Collateral, Cash Prepaid Finance Charge . . . . . . . . 85Mobile Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Total Sales Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94Motorcycle Purchase, Financed Prepaid Finance Charge . . . . . . . . . . . . . . . . . . . 97Closed-End Consumer Lending User Guide

Chapter 1:General InformationIntroductionThis Guide is designed to help you understand how to use the Closed-End LOANLINER ® Consumerand Consumer Dwelling Loan and Security Agreements and Disclosure Statement. The Loan andSecurity Agreements are described in detail in this Guide, including instructions for completing thedocument. This Guide also includes examples of loan transactions which may be helpful to you whencompleting the loan documents at your credit union.Service and SupportOne of the key features of any product you use is the service and support that goes with it. Youcan rely on LOANLINER Documents to provide you with excellent support and service for theLOANLINER Closed-End Lending Documents. You can receive LOANLINER assistance by:• Calling our team of operations and compliance experts at:800.356.5012• Contacting the LOANLINER Department at:Phone: 800.356.5012Fax: 608.236.6891E-Mail: loanliner@cunamutual.comMail: LOANLINER DocumentsPO Box 2991Madison, WI 53701-2991• Accessing the Compliance Resource Center at www.loanliner.com/complianceLending and Compliance SupportThe LOANLINER program has been part of credit unions’ lending success for several decades andLOANLINER products are currently being used by thousands of credit unions. You will have directaccess to this support via any of the channels described above.Definition – Closed-End CreditRegulation Z defines “closed-end credit” as consumer credit other than “open-end credit.” Closedendloans are those loans in which the credit union agrees to loan a certain amount to the borrower.The borrower agrees to repay that amount over a stated period of time at an agreed upon interestrate. The borrower cannot reborrow any portion that has been paid back.LOANLINER Closed-End SystemThe LOANLINER Closed-End Lending Documents were designed exclusively for credit unions. Wedeveloped our Loan Agreements so that they may be used to lend in all states. For credit unions thatdo multi-state lending, be sure you are using the correct state specific document. Consumer notesare available in either a fixed rate or fixed/variable rate version, whereas consumer dwelling notesClosed-End Consumer Lending User Guide 1

are available in either a fixed or a variable format due to space constraints caused by the Closed-EndInterim Rules effective 1/30/2011. Several versions of the documents include filing copies, for use infiling states. Refer to the chart on pages 3-4 for documents your credit union can order.ResourcesYou have several resources at your disposal when using the LOANLINER Closed-End LendingDocuments. You can call the toll-free numbers shown previously to get help with compliancequestions and operational issues related to the documents. If you have questions aboutadministering the payment protection products members can elect when using LOANLINERdocuments, you can call your local CUNA Mutual Group account representative.In addition to the people available to help you, you can also rely on the resources listed below:• User Guide. The User Guide provides the basics on how to use the LOANLINER documents.User Guides can be downloaded from the LOANLINER Lending Resource Center.• Miscellaneous Documents Guide. The Miscellaneous Documents Guide contains informationabout all of the optional documents available with the LOANLINER program. The guide providesdocument descriptions, samples, and completion instructions. Most of the documents described inthe Miscellaneous Documents Guide can be used for both open-end and closed-end lending.Using this GuideThis User Guide is intended to be used as:• A learning tool to understand the LOANLINER Closed-End Lending program.• A reference tool once you begin using the documents on a regular basis.The guide is intended to give you the basics on how to use the LOANLINER Closed-End Lendingprogram effectively in your credit union. If you need detailed assistance, you can rely on your localCUNA Mutual Group account representative or the LOANLINER staff for expert help on using any ofthe Closed-End Lending documents.Types of LoansThe LOANLINER Closed-End Lending documents were designed to handle all types of creditsecured by personal property, but due to the Closed-End Interim Rules, our current series ofconsumer notes can no longer be used for dwellings, including mobile homes. The rule affects allclosed-end real estate secured loans and closed-end loans secured by dwellings, such as mobilehomes, houseboats and other titled property considered a member’s dwelling, even if not the primaryresidence. Closed-end loans subject to Regulation Z secured by a dwelling, even if consideredpersonal property under state law are affected.In turn, we have created a series of consumer dwelling notes to be used for loans secured by realestate or a dwelling. However, our documents are not designed for Government Insured StudentLoans.We recommend you consult your attorney for proper documentation for these loans.Closed-End Consumer Lending User Guide 2

VERSIONFORMATTYPE1MEDIATYPEDOCUMENTNUMBERSTATES USED INLOAN AND SECURITY AGREEMENT AND DISCLOSURE STATEMENTS (NOTES)Right to Cure Fixed /Variable Rate P & E NXRC1* Colorado, DC, Kansas, Maine, Massachusetts,Missouri, Nebraska, West Virginia and statechartered credit unions lending to borrowers inSouth CarolinaRight to Cure Fixed Rate P & E NXRC2* Colorado, DC, Kansas, Maine, Massachusetts,Missouri, Nebraska, West Virginia and statechartered credit unions lending to borrowers inSouth CarolinaRight to CureRight to CureRight to CureContinuous FeedRight to CureSingle PremiumRight to CureSingle PremiumContinuous FeedVariable RateConsumer DwellingFixed RateConsumer DwellingE NXRC6* Colorado, DC, Kansas, Maine, Massachusetts,Missouri, Nebraska, West Virginia and statechartered credit unions lending to borrowers inSouth CarolinaE NXRC4* Colorado, DC, Kansas, Maine, Massachusetts,Missouri, Nebraska, West Virginia and statechartered credit unions lending to borrowers inSouth CarolinaFixed/Variable Rate P NXRC5* Colorado, DC, Kansas, Maine, Massachusetts,Missouri, Nebraska, West Virginia and statechartered credit unions lending to borrowers inSouth CarolinaFixed Rate P ZXRC2* Colorado, DC, Kansas, Maine, Massachusetts,Missouri, Nebraska, West Virginia and statechartered credit unions lending to borrowers inSouth CarolinaFixed Rate P ZXRC5* Colorado, DC, Kansas, Maine, Massachusetts,Missouri, Nebraska, West Virginia and statechartered credit unions lending to borrowers inSouth CarolinaFlorida Fixed/Variable Rate E NXFL1* Florida NoFlorida Fixed Rate E NXFL2* Florida NoFloridaFloridaVariable RateConsumer DwellingFixed RateConsumer DwellingFILINGCOPYE NXFL6* Florida NoE NXFL4* Florida NoIowa Fixed/Variable Rate P & E NXIA1* Iowa NoIowa Fixed Rate P & E NXIA2* Iowa NoIowaIowaIowaContinuous FeedVariable RateConsumer DwellingFixed RateConsumer DwellingE NXIA6* Iowa NoE NXIA4* Iowa NoFixed/Variable Rate P NXIA5* Iowa NoYesYesYesYesYesYesYesFILINGSTATESColorado,DC,NebraskaColorado,DC,NebraskaColorado,DC,NebraskaColorado,DC,NebraskaColorado,DC,NebraskaColorado,DC,NebraskaColorado,DC,NebraskaLouisiana Fixed /Variable Rate P & E NXLA1* Louisiana Yes LouisianaLouisiana Fixed Rate P & E NXLA2* Louisiana Yes LouisianaLouisianaLouisianaLouisianaContinuous FeedLouisianaSingle PremiumLouisianaSingle PremiumContinuous Feed* Document VersionVariable RateConsumer DwellingFixed RateConsumer DwellingE NXLA6* Louisiana Yes LouisianaE NXLA4* Louisiana Yes LouisianaFixed /Variable Rate P NXLA5* Louisiana Yes LouisianaFixed Rate P ZXLA2* Louisiana Yes LouisianaFixed Rate P ZXLA5* Louisiana Yes Louisiana1Media Type = P (Paper), E (Electronic), or P & E (Both)Closed-End Consumer Lending User Guide 3

VERSIONFORMATTYPE1MEDIATYPEDOCUMENTNUMBERSTATES USED INLOAN AND SECURITY AGREEMENT AND DISCLOSURE STATEMENTS (NOTES) (continued)New Hampshire Fixed /Variable Rate P & E NXNH1* New Hampshire NoNew Hampshire Fixed Rate P & E NXNH2* New Hampshire NoNew HampshireNew HampshireNew HampshireSingle PremiumNew HampshireSingle PremiumContinuous FeedVariable RateConsumer DwellingFixed RateConsumer DwellingFILINGCOPYE NXNH6* New Hampshire NoE NXNH4* New Hampshire NoFixed Rate P ZXNH2* New Hampshire NoFixed Rate P ZXNH5* New Hampshire NoVirginia Fixed /Variable Rate P & E NXVA1* Virginia NoVirginiaVirginiaVirginiaContinuous FeedFixed RateConsumer DwellingVariable RateConsumer DwellingE NXVA4* Virginia NoE NXVA6* Virginia NoFixed /Variable Rate P NXVA5* Virginia NoWisconsin Fixed /Variable Rate P & E NXWI1* Wisconsin YesWisconsin Fixed Rate P & E NXWI2* Wisconsin YesWisconsinWisconsinWisconsinContinuous FeedWisconsinSingle PremiumWisconsinSingle PremiumContinuous FeedVariable RateConsumer DwellingFixed RateConsumer DwellingE NXWI6* Wisconsin YesE NXWI4* Wisconsin YesFixed/Variable Rate P NXWI5* Wisconsin YesFixed Rate P ZXWI2* Wisconsin YesFixed Rate P ZXWI5* Wisconsin YesStandard Fixed /Variable Rate P & E NXX01* All other states plus federally charteredcredit unions lending to borrowers inSouth CarolinaStandard Fixed Rate P & E NXX02* All other states plus federally charteredcredit unions lending to borrowers inSouth CarolinaStandardStandardStandardContinuous FeedStandardSingle PremiumStandardSingle PremiumContinuous Feed* Document VersionVariable RateConsumer DwellingFixed RateConsumer DwellingE NXX06* All other states plus federally charteredcredit unions lending to borrowers inSouth CarolinaE NXX04* All other states plus federally charteredcredit unions lending to borrowers inSouth CarolinaFixed /Variable Rate P NXX05* All other states plus federally charteredcredit unions lending to borrowers inSouth CarolinaFixed Rate P ZXX02* All other states plus federally charteredcredit unions lending to borrowers inSouth CarolinaFixed Rate P ZXX05* All other states plus federally charteredcredit unions lending to borrowers inSouth Carolina1Media Type = P (Paper), E (Electronic), or P & E (Both)YesYesYesYesYesYesYesFILINGSTATESArkansas, Ohio,South Dakota,WyomingArkansas, Ohio,South Dakota,WyomingArkansas, Ohio,South Dakota,WyomingArkansas, Ohio,South Dakota,WyomingArkansas, Ohio,South Dakota,WyomingArkansas, Ohio,South Dakota,WyomingArkansas, Ohio,South Dakota,WyomingClosed-End Consumer Lending User Guide 4

Differences Between the VersionsStandard – This version is for those states that do not require a right to cure notice be given beforecalling the borrower in default.Right to Cure – This version is for those states that require a right to cure notice be given beforecalling the borrower in default.Florida – This version is used exclusively in Florida when the lender does not want the loantransaction to be subject to the Florida Documentary Stamp Tax under Section 208.08(1)(a) of theFlorida Statues. Under limited circumstances, the loan transaction may still be subject to the taxunder 208.08(1)(b) F.S. if the credit union files a UCC filing statement or records a similar evidenceof indebtedness within the state of Florida.Iowa – Iowa is a right to cure state and has different default language. Iowa law also requires that aspecial notice be given in the signature language for closed-end loans.Louisiana – Louisiana has special security agreement language.New Hampshire – New Hampshire law has special requirements for car loans which are included inthis version.Virginia – This version is for Virginia due to credit insurance requirements.Wisconsin – Wisconsin has special default provisions and security agreement language. Wisconsinlaw also requires that a special notice be given in the signature language for closed-end loans.Closed-End Consumer Lending User Guide 5

Chapter 2:Consumer Loan and Security Agreements andDisclosure StatementDocument Description – Paper formatWhen Used:Purpose:Document Number:How distributed:Components:Imprinting:State-specificversions:This document is used when a borrower has been approved for aclosed-end loan. It is used to document the transaction. The documentsare available for fixed rate loans only or for fixed/variable rate loans.Loan and Security Agreements and Disclosure Statement provide:1. disclosures required by Regulation Z.2. contract terms between the credit union and the borrower(s).3. Voluntary Payment Protection.All Truth in Lending disclosures are given in the “Fed Box” area, whichis outlined in red. The Loan Agreement and Security Agreement areseparate agreements.NXX01*A copy of this document must be given to a borrower (if joint borrowers,only one needs to receive a copy).Part 1 - Credit union copy of Loan & Security Agreements & DisclosureStatementPart 2 - Borrower copy of Loan & Security Agreements & DisclosureStatementPart 3 - Filing copy, if applicablePart 4 - Borrower’s copy of Voluntary Payment ProtectionRequired for Voluntary Payment Protection.Optional - Credit union’s name, address, telephone number, logo andlate charges.Iowa, Louisiana, New Hampshire, Right to Cure, Virginia, and Wisconsin*Indicates spaceholder for version numberClosed-End Consumer Lending User Guide 6

Page 1 sampleThank You For Borrowing At Your Credit Union1LOAN AND SECURITY AGREEMENTSAND DISCLOSURE STATEMENT2Fixed Rate Variable Rate Loan Date3Loan Number4Account Number5Borrower 1 Name and Address Borrower 2 Name (and address if different from Borrower 1)66TRUTH IN LENDING DISCLOSURE ‘e’ means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGEAmount FinancedTotal of PaymentsTotal Sale PriceThe cost of your credit as a yearly rate. The dollar amount the credit will cost you.The amount of credit provided to youor on your behalf.The amount you will have paid after you The total cost of your purchase on credit ishave made all payments as scheduled.7 % $ 8 $ 9 $ 10 $11Filing FeesNon-Filing Insurancewhich includes your downpayment of$ 12 $ 13$Variable Rate:1415 16Prepayment: If you pay off early you will not have to pay a penalty. Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any.Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union. If you get the insurance from us, you will pay$ 17Late Charge: 18Your PaymentSchedule will be:Number of Payments Amount of Payments When Payments Are Due19Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in your shares and dividends and, if any, yourdeposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/MakeYear I.D. Number Type/Lien Amount Value Key Number20Other (Describe):Pledge of Shares $ in Account Number $ in Account Number 21SEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to You Directly Amount Paid on Your Account Prepaid Finance Charge$ 22$ 23 $ 24 $ 25Amount Paid to Others $To$Toon Your Behalf 26$To IF AN AMOUNT IS MARKED WITH AN $ ASTERISK ( *), WE WILL BE To RETAINING A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse side 27 CONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE1. Promise to Pay: You promise to pay $ to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rateloans the interest rate is 28 % per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is% per year. 2. These Agreements are governed by the laws of ____________________________________________.3. Collection Costs: 29SIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.XBORROWER 1XOTHER BORROWEROWNER OF PROPERTY(SEAL)(SEAL)WITNESSDATEDATE“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willXBORROWER 2XOTHER BORROWEROWNER OF PROPERTYClosed-End Consumer Lending User Guide or profit for 25 hours a week or more on the date of any advance. If you 7(SEAL)(SEAL)WITNESSCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644DATEDATE• You are eligible for disability insurance only if you are working for wagesare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.

Page 1 instructions (continued)9. Amount Financed – Regulation Z, Section 1026.18(b) requires that the amount financed becalculated in the following way:a) Start with the principal loan amount.b) Add other amounts that are financed by the lender and are not part of the finance charge.Level rate and monthly renewable credit insurance is not financed; therefore, the cost forthis insurance should not be included in the “Amount Financed” section. Single premiuminsurance is financed and will be included in this amount.c) Subtract any prepaid finance charge.10. Total of Payments – The sum of the payments for the loan. Regulation Z, Section 1026.18(h).The total of payments should equal the sum of the payments reflected in the payment schedule.For example: If the payment schedule has 36 payments of $100.00, the total of payments wouldshow $3,600.00. The total of payments can include amounts that are not included in the financecharge or amount financed, such as credit life and credit disability insurance. It is not necessaryto put an ‘e’ for estimate in this box. The Loan and Security Agreements and DisclosureStatement should be completed with the total payments known at the time the disclosure isprepared.11. Total Sales Price – Regulation Z, Section 1026.18(j) requires this disclosure be used wheneveryour credit union is both the seller and the creditor. This is most likely to happen when you areselling a repossessed vehicle. In this section you must disclose both the total sales price and thedown payment amount, if any. The total sales price is the sum of the:a) cash priceb) amounts that are financed but not finance chargesc) finance charges12. Filing Fees – If you pass on the cost of filing fees (for example, a lien filing fee) to borrowers,whether directly or indirectly, you must disclose the cost — even if the borrower pays the fee incash to the credit union or a third party. This fee is not a finance charge if you only pass on theactual cost charged by government officials, Regulation Z, Section 1026.18(o).13. Non-Filing Insurance – Enter the dollar amount of the non-filing insurance. This insurancepremium is used to perfect the lien in lieu of actually filing the security interest, Regulation Z,Section 1026.18(o).Closed-End Consumer Lending User Guide 9

Page 1 instructions (continued)14. Variable Rate – The definition of a variable rate loan for closed-end credit is any loan that canincrease after consummation in a transaction not secured by the consumer’s principal dwelling.The Loan and Security Agreement is designed to handle all types of credit secured by personalproperty. There are many types of variable rate closed-end transactions and they generally fallinto one of the following categories:a) Changes that follow an external index such as the Prime Rate, Treasury Bill Rates, EleventhDistrict Cost of Funds, Treasury Securities, etc. These are indexes that are set up by someagency or group other than the credit union and are generally published in The Wall StreetJournal, the financial pages of many local newspapers and the Federal Reserve StatisticalRelease and Federal Reserve Board Bulletin.b) Changes that follow an external index that are beyond the control of the credit union suchas the rate charged by another local financial institution: e.g., the fixed rate charged by XYZFinancial for 30-year fixed rate mortgages. These rates generally are not officially publishedlike the indices described in (a.) above, but they are beyond the control of the credit union.c) Changes that follow an internal index of the credit union. An example would be the creditunion’s rate on 6-month certificates or the dividend rate paid on share accounts.d) Changes in the rate that are based entirely on the discretion of the credit union’s board ofdirectors. At any particular time the board of directors can decide that the interest rate willchange on existing loans.e) Changes that are tied to some event or occurrence. Common occurrences in credit unionloans which trigger an interest rate increase include: (a) when an employee leaves theemployment of the credit union, (b) discontinuing payroll deduction or automatic payment, (c)failure to maintain minimum account balances, or (d) failure to maintain certain services.f) A renewable balloon payment when (1) the credit union is unconditionally obligated torenew the balloon payment loan at the consumer’s option or subject to conditions within theconsumer’s control and (2) the credit union has the option of increasing the interest rate atthe time of renewal of the balloon.Closed-End Consumer Lending User Guide 10

Page 1 instructions (continued)REQUIRED DISCLOSURES FOR VARIABLE RATE LOANSThe following disclosures must appear in this section of the document:• The Circumstances Under Which the Rate May IncreaseSAMPLE LANGUAGE:The APR may increase during the term of this transaction if:[the prime interest rate of (creditor) increases.][the balance in your deposit account falls below $__________.][you terminate your employment with (employer).]• Any Limitation on the IncreaseSAMPLE LANGUAGE:[The interest rate will not increase above ______%.][The maximum interest rate increase at one time will be _____%.][The rate will not increase more than once every (time period).]• The Effect of an IncreaseSAMPLE LANGUAGE:Any increase will take the form of:[higher payment amounts.][more payments of the same amount.][a larger amount due at maturity.]• An Example of the Payment Terms that would Result from an IncreaseThe example must be either a standard example that illustrates the terms and conditions ofthe type of credit offered by the credit union or it may directly reflect the terms and conditionsof the particular transaction.In addition to the Truth in Lending Disclosures, you must also explain any other terms ofthe variable rate which are directly related. These include: the margin, interest rate floors,rounding of index values or payments.15. Prepayment – Regulation Z, Section 1026.18(k) requires disclosure of any prepayment penalty.The language in the LOANLINER documents prohibits a prepayment penalty.16. Required Deposit – Per Regulation Z, Section 1026.18(r) and footnote 45, this language isrequired when the borrower must maintain a deposit as a condition of the loan.17. Property Insurance – If your credit union sells property insurance, enter the amount of theinsurance premium. The term of the insurance must also be disclosed if it is less than the term ofthe loan, Regulation Z, Section 1026.18(n).Closed-End Consumer Lending User Guide 11

Page 1 instructions (continued)18. Late Charge – The late charge is any dollar or percentage charge that may be imposed beforematurity because of a late payment. This language is provided by the credit union and may beprinted on the documents, Regulation Z, Section 1026.18(l).19. Payment Schedule – Enter number, amount(s), and due date(s) of payments, Regulation Z,Section 1026.18(g). If credit insurance is elected, the premium is included in the payment amount.20. Security – The statement “Collateral securing other loans with the credit union may also securethis loan” is printed to disclose the existence of a cross collateral and future advance clause inthe Security Agreement. The statement “You are giving a security interest in your shares anddividends and, if any, your deposits and interest in the credit union; and the property describedbelow:” discloses that shares/deposits are also offered to secure the loan. The description of thecollateral must be included here since this portion of the Truth in Lending Disclosure also is partof the Security Agreement. A complete description of collateral should be shown. Also, additionalsecurity offered should be disclosed in the “other” field. For “Pledge of Shares,” enter the amountand account number for share secured loans.21. Contract Reference – This is a statement, per Regulation Z, Section 1026.18(p), thatthe consumer should refer to the appropriate contract documents for information aboutnonpayment, default, prepayment penalties, and rebates.Itemization of Amount Financed Section22. Itemization of Amount Financed – Enter amount the borrower financed per Regulation Z,Section 1026.18(c). This is the amount shown in the “AmountFinanced” box.23. Amount Given to You Directly – Enter the amount of money given to the borrower in the formof cash or a check, as well as funds placed in an asset account. (Asset accounts include, but arenot limited to, share accounts, share draft accounts, etc.)Note: If a check is made out to the borrower and another party, this amount is to be included inthis box. You don’t have to show the other party in the section “Amounts Paid to Others on yourBehalf,” Regulation Z, Official Staff Interpretation, paragraph 18(c)(1)(i) - 1. Amounts paid toConsumer.24. Amount Paid on Your Account – This is the amount your credit union will use to pay offan existing loan balance. This section would include a payment of an existing loan balance(principal and accrued interest) on a prior loan. Only amounts paid to loan accounts should beshown here, Regulation Z, Section 1026.18(c)(1)(ii).25. Prepaid Finance Charge – Prepaid finance charges include any portion of the finance chargepaid prior to or at closing or settlement. They may be paid in cash or financed and withheldfrom the proceeds. Some common examples include: service fees, loan fees, loan guaranteeinsurance, credit report fees, residual value insurance, and mandatory GAP coverage. Prepaidfinance charges are subtracted from the amount financed and added to the finance charge fordisclosure purposes. This will result in an APR that is different than the contractual interest rate.Closed-End Consumer Lending User Guide 12

Page 1 instructions (continued)26. Amount Paid to Others on Your Behalf – These boxes are provided to disclose amountspaid to other persons by the credit union on the borrower’s behalf. These persons must beidentified by name except that payments to government agencies, public officials, credit reportagencies, appraisers and insurance companies may be generically identified with phrases like“credit bureau” or “state agency.” If loan checks are made payable to a third party only, and notthe borrower, the amount of the payment and the name of the third party must be disclosed,Regulation Z, Section 1026.18(c)(1)(iii).Note: The level rate or monthly renewable credit disability/credit life costs or amounts need notbe disclosed in this section.This section includes a sentence which reads as follows: If an amount is marked with anasterisk(*), we will be retaining a portion of the amount. An asterisk should be used wheneverthe borrower is financing a product for which the credit union imposes an “upcharge.” Typically,if the credit union sells mechanical repair coverage (MRC) or extended warranties and retainsa portion of the amount, then an asterisk will be needed. An example would be if the borrowerpurchased an extended warranty from the credit union. The warranty may cost the credit union$300.00, but the credit union charges the borrower $400.00. The $100.00 difference is an“upcharge” on this product. The credit union needs to disclose that it is retaining a portion of the$400.00 that is being charged to the borrower.27. Consumers’ Claims and Defenses Notice – Whenever your credit union is selling arepossessed vehicle and financing it, the checkbox for the “Consumers’ Claims and DefensesNotice” should be checked. The Consumers’ Claims and Defenses Notice may also be requiredin situations where the credit union has a business relationship with the seller of goods. Thenotice appears in the Security Agreement.Loan Agreement Section28. Promise to Pay – This is the contractual promise to repay the principal loan amount plusinterest. Your credit union should put the note interest rate here as well as the principal amountborrowed. If this is a variable rate loan, the initial interest rate is entered here. The contractualinterest rate used to amortize the loan may be different than the APR if there are prepaid financecharges as part of the loan. The sample shows the fixed/variable promise to pay language. Thefixed rate language is as follows: You promise to pay $______ to the credit union plus intereston the unpaid balance until what you owe has been repaid. For fixed rate loans the interest rateis ______% per year.29. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are to be disclosed. This language may be imprinted.Closed-End Consumer Lending User Guide 13

SEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to You Directly Amount Paid on Your Account Prepaid Finance Charge$ $ $ $Amount Paid to Others $To$Toon Your Behalf$To IF AN AMOUNT IS MARKED WITH AN $ ASTERISK ( *), WE WILL BE To RETAINING A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse sideCONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE1. Promise to Pay: You promise to pay $ to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rate% per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is% per year. 2. These Agreements are governed by the laws of ____________________________________________.3. Collection Costs:Page loans 1 the (Signature interest rate is section) sample30SIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.XBORROWER 1XOTHER BORROWEROWNER OF PROPERTY(SEAL)(SEAL)WITNESSDATEDATEX31 BORROWER 2XOTHER BORROWEROWNER OF PROPERTY(SEAL)(SEAL)WITNESSCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644DATEDATE32“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willreceive written notice before any increase goes into effect. You have theright to stop this insurance by notifying your credit union in writing. Yoursignature below means you agree that:• If you elect insurance, you authorize the credit union to add the chargesfor insurance to your loan each month.• You are eligible for disability insurance only if you are working for wagesor profit for 25 hours a week or more on the date of any advance. If youare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.• You are eligible for insurance up to the Maximum Age for Insurance.Insurance will stop when you reach that age.NOTE: THE LIFE AND DISABILITY INSURANCE CONTAINS CERTAIN BENEFITEXCLUSIONS, INCLUDING A PRE-EXISTING CONDITION EXCLUSION.PLEASE REFER TO YOUR CERTIFICATE FOR DETAILS.YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULE COVERED MEMBER (Please Print)SINGLE CREDIT DISABILITY$ eabSINGLE CREDIT LIFE$ eJOINT CREDIT LIFE$ edeIf you are totally disabled for more than 30 days, then the disability benefit will begin with the 31st day of disability.GROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOAN INSURANCE MAXIMUMSDISABILITYMAX. MONTHLY TOTAL DISABILITY BENEFIT$ 600XXX-XXXX-XDATE OF ISSUE OF THIS CERTIFICATEMAX. INSURABLE BALANCE PER LOAN ACCOUNTMAX. AGE FOR INSURANCEc $30,00066LIFEN/A$30,00070MEMBER’S DATE OF BIRTHXgJOINT INSURED’S DATE OF BIRTHSECONDARY BENEFICIARY (If you desire to name one)fSIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATEAPP. 825-0786(Only required if JOINT CREDIT LIFE coverage is selected)Xh© CUNA Mutual Group 2000, 04-06, 08, 11, 12 All Rights Reserved CREDIT UNION COPY NXX01BClosed-End Consumer Lending User Guide 14

Page 1 (Signature section) instructions30. Signature Section – This area contains signature language that will vary on some documentsdue to state law variations.31. Borrower’s Signature – The borrower signs, or otherwise authenticates the Loan and SecurityAgreements and Disclosure Statement in this area. Additional signatures may be obtained usingthese areas. By signing, or otherwise authenticating as a borrower, a person is agreeing to theLoan and Security Agreements. If the owner of the collateral is not a borrower, the box “Ownerof Collateral” should be checked. (This is the ONLY situation when this box should be checked.)The owner of collateral is agreeing only to the terms of the Security Agreement. A witness mayalso sign here. A witness signature is not required under the Truth in Lending Act.Voluntary Payment Protection Section32. Credit Insurance Enrollment Form/Schedule – The enrollment section on the documents youare using may look different than it appears on the sample.Note: Credit insurance enrollment will not be available on this form in all states.a) Coverage(s) - The borrower must check whether or not coverage is desired. The coverage(s)offered by your credit union will be automatically imprinted by CUNA Mutual Group.b) Premium Schedule - The total estimated premium for each coverage elected by theborrower must be calculated and disclosed in this section according to Regulation 1026.4(d)(1)(ii) of Regulation Z.c) Insurance Maximums - The coverage maximums applicable to your credit union will bedisclosed in this section. These are automatically imprinted by CUNA Mutual Group.d) Blank Area - If your credit union has special contract provisions, they will be imprinted hereby CUNA Mutual Group.e) Waiting Period - If your credit union has Credit Disability coverage, this section will beimprinted by CUNA Mutual Group.f) Secondary Beneficiary - If the borrower wishes to name a secondary beneficiary who wouldreceive any excess proceeds from an insurance benefit, it should be done in this box. Theborrower is not required to name a secondary beneficiary. The borrower or credit union maycomplete this information.g) Signature of Borrower - Section 1026.4(d)(1)(iii) of Regulation Z requires the borrower’ssignature if credit insurance is elected. While Regulation Z only requires a signature if theborrower elects insurance, we recommend a signature always be obtained whether insuranceis elected or not. Therefore, the borrower signs, or otherwise authenticates in this spaceelecting or not electing insurance.Your credit union must also obtain the borrower’s date of birth. This information is required todetermine the member’s eligibility for coverage.h) Signature of Co-Borrower - This signature is obtained ONLY when joint credit life insuranceis elected. A co-borrower is eligible for joint credit life only if they have signed the Loan andSecurity Agreements and Disclosure Statement.Your credit union must also obtain the date of birth of the co-borrower to determine eligibilityfor joint credit life insurance coverage.Closed-End Consumer Lending User Guide 15

Page 2 sampleLOAN AGREEMENTIn this Loan Agreement (“Agreement”), which begins on the reverse side, all a payment of the amount required on or before the date it is due. You will be inreferences to “Credit Union,” “we,” “our,” or “us,” mean the Credit Union whose default if you break any promise you made in connection with this loan or ifname appears on this document and anyone to whom the Credit Union assigns anyone is in default under any security agreement made in connection with thisor transfers this Agreement. All references to “you” or “your” mean each person Agreement. You will be in default if you die, file for bankruptcy, become insolventwho signs, or otherwise authenticates, this Agreement as a borrower.(that is, unable to pay your bills and loans as they become due), or if you made33 4. PAYMENTS — You promise to make payments of the amount and at the timeany false or misleading statements in your loan application. You will also be inshown in the Truth in Lending Disclosure. If this is a variable rate loan, the Truthdefault if something happens that we believe may seriously affect your ability toin Lending Disclosure section tells you whether, if the interest rate increases, yourepay what you owe under this Agreement or if you are in default under anywill have to make more payments, higher payments, or if the final payment willother loan agreement you have with us.be a balloon payment. You may prepay any amount without penalty. If you prepay 8. ACTIONS AFTER DEFAULT — When you are in default, we may demand 37any part of what you owe, you are still required to make the regularly scheduled immediate payment of the entire unpaid balance under this Agreement. You waivepayments, unless we have agreed to a change in the payment schedule. Because any right you have to receive demand for payment, notice of intent to demandthis is a simple interest loan, if you do not make payments exactly as scheduled, immediate payment and notice of demand for immediate payment. If we demandyour final payment may be more or less than the amount of the final payment that immediate payment, you will continue to pay interest at the rate provided for inis disclosed. If you elect voluntary payment protection, we will either include the this Agreement, until what you owe has been repaid. We will also apply againstpremium or program fee in your payments or extend the term of your loan. If the what you owe any shares and/or deposits given as security under this Agreement.term is extended, you will be required to make additional payments of the We may also exercise any other rights given by law when you are in default.scheduled amount, until what you owe has been paid. You promise to make all 9. EACH PERSON RESPONSIBLE — Each person who signs, or otherwise 38payments to the place we choose. If this loan refinances another loan we have authenticates, this Agreement will be individually and jointly responsible forwith you, the other loan will be canceled and refinanced as of the date of this paying the entire amount owed under this Agreement. This means we can enforceloan. Unless otherwise required by law, payments will be applied to amounts our rights against any one of you individually or against all of you together.owed in the manner we choose.10. LATE CHARGE — If you are late in making a payment, you promise to pay 3934 5. LOAN PROCEEDS BY MAIL — If the proceeds of this loan are mailed to you, the late charge shown in the Truth in Lending Disclosure. If no late charge isinterest on this loan begins on the date the loan proceeds are mailed to you. shown, you will not be charged one.11. DELAY IN ENFORCING RIGHTS — We can delay enforcing any of our rights 4035 6. SECURITY FOR LOAN — This Agreement is secured by all property described under this Agreement any number of times without losing the ability to exercisein the “Security” section of the Truth in Lending Disclosure. Property securing other our rights later. We can enforce this Agreement against your heirs or legalloans you have with us also secures this loan, unless the property is a dwelling. In representatives.addition to your pledge of shares, we may also have what is known as a statutory12. CONTINUED EFFECTIVENESS — If any part of this Agreement is 41lien on all individual and joint accounts you have with us. A statutory lien meansdetermined by a court to be unenforceable, the rest will remain in effect.we have the right under federal law and many state laws to claim an interest inyour accounts. We can enforce a statutory lien against your shares and dividends, 13. NOTICES — Notices will be sent to you at the most recent address you have 42and if any, interest and deposits, in all individual and joint accounts you have given us in writing. Notice to any one of you will be notice to all.with us to satisfy any outstanding financial obligation that is due and payable to 14. USE OF ACCOUNT — You promise to use your account for consumer43us. We may exercise our right to enforce this lien without further notice to you, (personal, family or household) purposes, unless the Credit Union gives youto the extent permitted by law. For all borrowers: You pledge as security for this written permission to use the account also for agricultural or commercialloan all shares and dividends and, if any, all deposits and interest in all joint and purposes, or to purchase real estate.individual accounts you have with the Credit Union now and in the future. The 15. NO ORAL AGREEMENTS — THIS NOTE CONSTITUTES A “WRITTEN LOAN 44statutory lien and/or your pledge will allow us to apply the funds in youraccount(s) to what you owe when you are in default. The statutory lien andyour pledge do not apply to any Individual Retirement Account or any otheraccount that would lose special tax treatment under state or federal law if given36454647484950as security.7. DEFAULT — You will be in default under this Agreement if you do not makeIn this Agreement all references to “Credit Union,” “we,” “our” or “us” mean theCredit Union whose name appears on this document and anyone to whom theCredit Union assigns or transfers this Agreement. All references to the “Loan”mean the loan described in the Loan Agreement that is part of this document.All references to “you” or “your” mean any person who signs, or otherwiseauthenticates, this Agreement.1. THE SECURITY FOR THE LOAN — You give us what is known as a securityinterest in the property described in the “Security” section of the Truth inLending Disclosure that is part of this document (“the Property”). The securityinterest you give includes all accessions. Accessions are things which areattached to or installed in the Property now or in the future. The security interestalso includes any replacements for the Property which you buy within 10 daysof the Loan and any extensions, renewals or refinancings of the Loan. It alsoincludes any money you receive from selling the Property or from insurance youhave on the Property. If the value of the Property declines, you promise to giveus more property as security if asked to do so.2. WHAT THE SECURITY INTEREST COVERS/CROSS COLLATERAL PROVI-SIONS — The security interest secures the Loan and any extensions, renewalsor refinancings of the Loan. The security interest also secures any other loans,including any credit card loan, you have now or receive in the future from usand any other amounts you owe us for any reason now or in the future, exceptany loan secured by your principal dwelling. If the Property is householdgoods as defined by the Federal Trade Commission Credit Practices Rule or yourprincipal dwelling, the Property will secure only this Loan and not other loans oramounts you owe us.3. OWNERSHIP OF THE PROPERTY — You promise that you own the Propertyor, if this Loan is to buy the Property, you promise you will use the Loan proceedsfor that purpose. You promise that no one else has any interest in or claim againstthe Property that you have not already told us about. You promise not to sell orlease the Property or to use it as security for a loan with another creditor until theLoan is repaid. You promise you will allow no other security interest or lien toattach to the Property either by your actions or by operation of law.4. PROTECTING THE SECURITY INTEREST — If your state issues a title forthe Property, you promise to have our security interest shown on the title. Wemay have to file what is called a financing statement to protect our securityinterest from the claims of others. You irrevocably authorize us to execute(on your behalf), if applicable, and file one or more financing, continuation oramendment statements pursuant to the Uniform Commercial Code (UCC) in aform satisfactory to us. You promise to do whatever else we think is necessaryto protect our security interest in the Property. You also promise to pay all costs,including but not limited to any attorney fees, we incur in protecting our securityinterest and rights in the Property, to the extent permitted by applicable law.5. USE OF PROPERTY — Until the Loan has been paid off, you promise youwill: (1) Use the Property carefully and keep it in good repair. (2) Obtain ourwritten permission before making major changes to the Property or changingthe address where the Property is kept. (3) Inform us in writing before changingyour address. (4) Allow us to inspect the Property. (5) Promptly notify us if theProperty is damaged, stolen or abused. (6) Not use the Property for anyunlawful purpose. (7) Not retitle property in another state without telling us.6. PROPERTY INSURANCE, TAXES AND FEES — You promise to pay all taxesand fees (like registration fees) due on the Property and to keep the Propertyinsured against loss and damage. The amount and coverage of the propertyinsurance must be acceptable to us. You may provide the property insurancethrough a policy you already have, or through a policy you get and pay for. Youpromise to make the insurance policy payable to us and to deliver the policy orproof of coverage to us if asked to do so.If you cancel your insurance and get a refund, we have a right to the refund. Ifthe Property is lost or damaged, we can use the insurance settlement to repairthe Property or apply it towards what you owe. You authorize us to endorse anydraft or check which may be payable to you in order for us to collect any refundor benefits due under your insurance policy.If you do not pay the taxes or fees on the Property when due or keep it insured,we may pay these obligations, but we are not required to do so. Any money wespend for taxes, fees or insurance will be added to the unpaid balance of theLoan and you will pay interest on those amounts at the same rate you agreed topay on the Loan. We may receive payments in connection with the insurancefrom a company which provides the insurance. We may monitor our loans forthe purpose of determining whether you and other borrowers have compliedwith the insurance requirements of our loan agreements or may engage othersSECURITY AGREEMENTAGREEMENT” PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS ANDCOMMERCE CODE, IF SUCH SECTION APPLIES. THIS WRITTEN LOANAGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES ANDMAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NOUNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.to do so. The insurance charge added to the Loan may include (1) the insurancecompany’s payments to us and (2) the cost of determining compliance with theinsurance requirements. If we add amounts for taxes, fees or insurance to theunpaid balance of the Loan, we may increase your payments to pay the amountadded within the term of the insurance or term of the Loan.7. INSURANCE NOTICE — If you do not purchase the required propertyinsurance, the insurance we may purchase and charge you for will cover onlyour interest in the Property. The premium for this insurance may be higherbecause the insurance company may have given us the right to purchaseinsurance after uninsured collateral is lost or damaged. The insurance will notbe liability insurance and will not satisfy any state financial responsibility orno fault laws.8. DEFAULT — You will be in default if you break any promise you make or fail52to perform any obligation you have under this Agreement. You will be in defaultif any property you have given us as security is repossessed by someone else,seized under a forfeiture or similar law, or if anything else happens thatsignificantly affects the value of the Property or our security interest in it. Youwill also be in default under this Agreement if the Loan is in default.9. WHAT HAPPENS IF YOU ARE IN DEFAULT — When you are in default, we 53may demand immediate payment of the outstanding balance of the Loan withoutgiving you advance notice and take possession of the Property. You agree theCredit Union has the right to take possession of the Property without judicialprocess if this can be done without breach of the peace. If we ask, you promiseto deliver the Property at a time and place we choose. If the Property is a motorvehicle or boat, you agree that we may obtain a key or other device necessary tounlock and operate it, when you are in default. We will not be responsible for anyother property not covered by this Agreement that you leave inside the Propertyor that is attached to the Property. We will try to return that property to you ormake it available for you to claim.After we have possession of the Property, we can sell it and apply the money toany amounts you owe us. We will give you notice of any public disposition orthe date after which a private disposition will be held. Our expenses for takingpossession of and selling the Property will be deducted from the money receivedfrom the sale. Those costs may include the cost of storing the Property,preparing it for sale and attorney’s fees to the extent permitted under state lawor awarded under the Bankruptcy Code.If you have agreed to pay the Loan, you must pay any amount that remainsunpaid after the sale money has been applied to the unpaid balance of the Loanand to what you owe under this Agreement. You agree to pay interest on thatamount at the same rate as the Loan, until that amount has been paid.10. DELAY IN ENFORCING RIGHTS AND CHANGES IN THE LOAN — We can 54delay enforcing any of our rights under this Agreement any number of timeswithout losing the ability to exercise our rights later. We can enforce thisAgreement against your heirs or legal representatives. If we change the terms ofthe Loan, you agree that this Agreement will remain in effect.11. CONTINUED EFFECTIVENESS — If any part of this Agreement is determined 55by a court to be unenforceable, the rest will remain in effect.12. NOTICE TO NORTH DAKOTA BORROWERS PURCHASING A MOTOR 56VEHICLE — THE MOTOR VEHICLE IN THIS TRANSACTION MAY BE SUBJECTTO REPOSSESSION. IF IT IS REPOSSESSED AND SOLD TO SOMEONE ELSE,AND ALL AMOUNTS DUE TO THE SECURED PARTY ARE NOT RECEIVED INTHAT SALE, YOU MAY HAVE TO PAY THE DIFFERENCE.13. NOTICE FOR ARIZONA OWNERS OF PROPERTY — It is unlawful for you 57to fail to return a motor vehicle that is subject to a security interest, withinthirty days after you have received notice of default. The notice will be mailedto the address you gave us. It is your responsibility to notify us if your addresschanges. The maximum penalty for unlawful failure to return a motor vehicle isone year in prison and/or a fine of $150,000.00.14. CONSUMERS’ CLAIMS AND DEFENSES NOTICE — The following 58paragraph applies only when the box on the reverse side is checked.NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT CONTRACTIS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTORCOULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICESOBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF.RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEEDAMOUNTS PAID BY THE DEBTOR HEREUNDER.51Closed-End Consumer Lending User Guide 16

Page 2 instructions33. Payments – This is the borrower’s promise to make payments as specified in the Truth inLending Disclosure. This paragraph also discloses to the borrower that there is no prepaymentpenalty and if payments are not made as scheduled, the final payment may be more or lessthan the final payment that was disclosed. Also, if voluntary payment protection is elected, thepremium or program fees may be included in the payment or the loan term will be extended. Ifyou are using a fixed/variable note, this section would also contain information on the variablerate.34. Loan Proceeds By Mail – This is an explanation that interest begins on the date the loanproceeds are mailed, if this loan is transacted through the mail.35. Security For Loan – Regulation Z, Section 1026.18(m) requires that the creditor disclose thefact that it will acquire a security interest in the property purchased or in other property identifiedby item or type. The LOANLINER Loan Agreement discloses that the loan is secured by all itemsdescribed in the “Security” section of the Truth in Lending Disclosure.The loan also is secured by property securing other loans with the credit union, unless theproperty is a dwelling.Much of this section deals with a statutory lien. A statutory lien is applicable to federal andmany state-chartered credit unions. In 1999, NCUA issued regulations that required federalcredit unions to disclose statutory liens in a certain manner. If a borrower’s loan is in default,the statutory lien allows your credit union to apply the balance of shares and dividends in allindividual and joint accounts with your credit union to satisfy the obligation.There is also a general pledge of shares in this section, which allows your credit union to applythe funds in your borrowers’ account(s) to what they owe when they are in default. This pledge isconsidered additional security for all loans. The pledge does not apply to Individual RetirementAccounts (IRA) or any other account that would lose special tax treatment under state or federallaw if given as security. As long as your borrower is making payments and the loan is not sharesecured, your borrower has access to his/her shares and/or deposits.Note: For state-chartered credit unions located in states where statutory liens are not allowed,the general pledge of shares would apply.36. Default – This paragraph describes the elements of default and allows your credit union toaccelerate the unpaid balance in the event of default. The default language will vary by version,due to state law requirements. Be sure to read this paragraph before deciding whether you cancall a loan in default. If you have questions, consult your legal counsel.37. Actions After Default – This section includes a statement allowing the credit union to acceleratethe unpaid balance in the event of default. If this paragraph gives the borrower a right to curethe default, be sure you comply with the applicable state law on timing and content of the Rightto Cure Notice. When a debt is accelerated, interest will continue on the unpaid balance atthe same rate. Lastly, your credit union may exercise any other rights given by law when yourborrower is in default.38. Each Person Responsible – This paragraph explains that each person who signs, or otherwiseauthenticates the Loan Agreement will be held individually and jointly responsible for paying theentire amount owed under the Agreement.Closed-End Consumer Lending User Guide 17

Page 2 instructions (continued)39. Late Charge – This paragraph explains that if your borrower is late in making a payment, theypromise to pay the late charge shown in the Truth in Lending Disclosure, if one is disclosed.40. Delay in Enforcing Rights – This statement provides that your credit union can delay enforcingany rights under this Agreement without losing the ability to exercise those rights later.41. Continued Effectiveness – This statement deems that if a court finds any part of the Agreementunenforceable, the remainder of the Agreement remains in effect.42. Notices – This paragraph states that your credit union will send notices to the most recentaddress your borrower gave your credit union in writing and that notice to one is notice to all.43. Use of Account – This paragraph was added to the Loan Agreement due to the BankruptcyAbuse Prevention and Consumer Protection Act of 2005 (BAPCPA) which gave the credit unionprotection against court-ordered reduction (cramdown) of a secured balance due on purchasemoneysecured debt acquired for personal, family or household purposes. This provision willprove a vehicle was purchased for personal use.44. No Oral Agreements – This paragraph applies to Texas transactions and confirms that therights and obligations of the borrower and lender shall be determined solely from the writtenLoan Agreements and any prior oral agreements between the lender and borrower aresuperseded by the Loan Agreement.Security Agreement Section45. The Security For the Loan – This paragraph grants your credit union a security interest inthe property described in the “Security” section of the Truth in Lending Disclosure. It is veryimportant that you thoroughly describe the collateral in the Truth in Lending Disclosure. It alsopermits your credit union a security interest in accessions, proceeds of the collateral, and allowsyou to obtain additional collateral if the market value of the collateral declines.46. What the Security Interest Covers – This paragraph states that the property described in theTruth in Lending Disclosure secures the loan. The security for the loan will also be security forother debts with the credit union, now and in the future, unless the property is a dwelling. This isknown as a “cross-collateral” clause. However, if the property is household goods as defined byFederal Trade Commission Credit Practices Rule, the property can only secure this loan and notother loans or amounts owed to the credit union.47. Ownership of the Property – This paragraph describes the borrower’s ownership rights. Thisclause explains that a borrower can be considered in default if they sign the Security Agreementand they do not own the collateral shown in the “Security” section of the Truth in LendingDisclosure. It outlines that the borrower cannot sell the collateral or give anyone else a securityinterest in it until the debt has been paid, nor can they allow any other security interest or lien tobe attached to the property.48. Protecting the Security Interest – This paragraph requires the borrower to promise to assistthe credit union in any way to protect the security interest. It also requires the borrower toidentify your credit union as lien holder on the title and requires the borrower to sign a financingstatement, if necessary.Closed-End Consumer Lending User Guide 18

Page 2 instructions (continued)58. Consumers’ Claims and Defenses Notice – This is a notice required by the Federal TradeCommission. It is often referred to as the “Holder in Due Course” rule. This notice must begiven when the credit union is selling a repossessed car. It is also given in those situations inwhich there is a “business arrangement” between the seller and your credit union. “Businessarrangement” is defined as “any understanding, procedure, course of dealing or arrangement,formal or informal, between a creditor and a seller, in connection with the sale of goods orservices to consumers or the financing thereof.”This rule applies to both affiliations and referrals. Examples of an affiliation would include:maintenance of loan application documents in the office of the seller, agreement by the sellerwith the creditor to prepare loan documents, the creditor’s referrals of customers to a salesoutlet, payment of consideration to a seller for furnishing the loan customers or to a creditor forfurnishing sales prospects, the assignment of indirect paper or the referral of loan customersto a creditor, active creditor participation in the sales program, joint advertising efforts, or anagreement to purchase paper on an indirect basis. Referral is viewed as a pattern of cooperativeactivity directly relating to the arranging of credit. The seller and the creditor must be engaged incooperative or concerted conduct to send a consumer to the creditor.The box on the front of the Loan Agreement should be checked if the dealer advised you, byagreement or otherwise, that this notice is applicable. The box should also be checked if you areselling a repossessed vehicle.Closed-End Consumer Lending User Guide 20

Chapter 3:Consumer Loan and Security Agreements andDisclosure StatementDocument Description – Electronic formatWhen Used:Purpose:DocumentNumber:How distributed:State-specificversions:This document is used when a borrower has been approved for aclosed-end loan. It is used to document the transaction. The documentsare available for fixed rate loans only or for fixed/variable rate loans.The Loan and Security Agreements and Disclosure Statement provide:1. disclosures required by Regulation Z2. contract terms between the credit union and the borrower(s)All Truth in Lending disclosures are given in the “Fed Box” area. TheLoan Agreement and Security Agreement are separate agreements.NXX01*A copy of this document must be given to a borrower (if joint borrowers,only one needs to receive a copy)Florida, Iowa, Louisiana, New Hampshire, Right to Cure, Virginia andWisconsin*Indicates spaceholder for version numberClosed-End Consumer Lending User Guide 21

Page 1 sample12FIXED RATEVARIABLE RATENAME AND ADDRESS3LOAN DATE LOAN NUMBER4BORROWER 15Loan and Security Agreementsand Disclosure StatementACCOUNT NUMBERGROUP POLICY NUMBER MATURITY DATE67BORROWER 2NAME (AND ADDRESS IF DIFFERENT FROM BORROWER 1)8 8TRUTH IN LENDING DISCLOSURE 'e' means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGE Amount Financed Total of Payments Total Sale PriceThe cost of your credit as a yearly rate. The dollar amount the The amount of credit The amount you will have The total cost of your purchase on credit iscredit will cost you. provided to you or on paid after you have made $your behalf.all payments as scheduled.which includes your9 %$ 10$ 11$ 12downpayment of $ 13 .Your Payment Schedule Will Be:Prepayment: If you pay off early you will not have topay a penalty.Number of Payments Amount of Payments When Payments Are Due17$Required Deposit: The Annual Percentage Rate doesnot take into account your required deposit, if any.1418$Demand: This obligation has a demand feature.All disclosures are based on an assumed19maturity of one year.Property Insurance: You may obtain property insurance from anyone youwant that is acceptable to the Credit Union. If you get the insurance from us, Filing Fees Non-Filing Insuranceyou will pay $ 15$ 20$ 21Late Charge:16Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in yourshares and dividends and, if any, your deposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/Make Year I.D. Number Type ValueKey Number$22$$Other (Describe)Pledge of Shares $in Account No.$ in Account No.Variable Rate:23See your contract documents for any additional information about nonpayment, default, and any required repayment in full before thescheduled date.24SIGNATURESBy signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property isdescribed in the "Security" section of the Truth in Lending Disclosure, you also agree to the terms of the SecurityAgreement. If you sign, or otherwise authenticate, as "Owner of Property" you agree only to the terms of the SecurityAgreement.CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.XBORROWER 1(SEAL)DATE25XBORROWER 2(SEAL)DATE26XOTHER BORROWER OWNER OF PROPERTY WITNESS(SEAL)DATEX(SEAL)OTHER BORROWER OWNER OF PROPERTY WITNESS DATECUNA Mutual Group 1999, 2000, 01, 02, 03, 04, 06, 08 All Rights ReservedNXX01A-eClosed-End Consumer Lending User Guide 22

Page 1 instructions (continued)11. Amount Financed – Regulation Z, Section 1026.18(b) requires that the amount financed becalculated in the following way:a) Start with the principal loan amount.b) Add other amounts that are financed by the lender and are not part of the finance charge.Level rate and monthly renewable credit insurance is not financed; therefore, the cost forthis insurance should not be included in the “Amount Financed” section. Single premiuminsurance is financed and will be included in this amount.c) Subtract any prepaid finance charge.12. Total of Payments – The sum of the payments for the loan, Regulation Z, Section 1026.18(h).The total of payments should equal the sum of the payments reflected in the payment schedule.For example: If the payment schedule has 36 payments of $100.00, the total of payments wouldshow $3,600.00. The total of payments can include amounts that are not included in the financecharge or amount financed, such as credit life and credit disability insurance. It is not necessaryto put an ‘e’ for estimate in this box. The Loan and Security Agreements and DisclosureStatement should be completed with the total payments known at the time the disclosure isprepared.13. Total Sales Price – Regulation Z, Section 1026.18(j) requires this disclosure be used wheneveryour credit union is both the seller and the creditor. This is most likely to happen when you areselling a repossessed vehicle. In this section you must disclose both the total sale price and thedownpayment amount, if any.The total sale price is the sum of the:a) cash priceb) amounts that are financed but not finance chargesc) finance charge14. Payment Schedule – Enter number, amount(s), and due date(s) of payments, Regulation Z,Section 1026.18(g). If voluntary payment protection is elected, the premium is included in thepayment amount.15. Property Insurance – If your credit union sells property insurance, enter the amount of theinsurance premium. The term of the insurance must also be disclosed if it is less than the term ofthe loan, Regulation Z, Section 1026.18(n).16. Late Charge – The late charge is any dollar or percentage charge that may be imposed beforematurity due to a late payment. This language is provided by the credit union and may be printedon the documents, Regulation Z, Section 1026.18(l).17. Prepayment – Regulation Z, Section 1026.18(k) requires disclosure of any prepayment penalty.The language in the LOANLINER documents prohibits a prepayment penalty.Closed-End Consumer Lending User Guide 24

Page 1 instructions (continued)18. Required Deposit – Per Regulation Z, Section 1026.18(r) and footnote 45, this language isrequired when the borrower must maintain a deposit as a condition of the loan.19. Demand Feature – Enter an “X” in the first box if this loan has a demand feature. A demandfeature enables the credit union to call a loan payable in full at any time or within a statedperiod of time, even if the borrower is making payments and is not in default. If the loan is ademand loan, you must add additional language to the loan agreement in the “Other Provisions”paragraph.20. Filing Fees – If you pass on the cost of filing fees (for example, a lien filing fee) to borrowers,whether directly or indirectly, you must disclose the cost — even if the borrower pays the fee incash to the credit union or a third party. This fee is not a finance charge if you only pass on theactual cost charged by government officials, Regulation Z, Section 1026.18(o).21. Non-Filing Insurance – Enter the dollar amount of the non-filing insurance. This insurancepremium is used to perfect the lien in lieu of actually filing the security interest, Regulation Z,Section 1026.18(o).22. Security – The statement “Collateral securing other loans with the credit union may alsosecure this loan” is printed to disclose the existence of a cross-collateral clause in the SecurityAgreement. The statement “You are giving a security interest in your shares and dividends and,if any, your deposits and interest in the credit union; and the property described below:” disclosesthat shares/deposits are also offered to secure the loan. The description of the collateral mustbe included here since this portion of the Truth in Lending Disclosure also is part of the SecurityAgreement. A complete description of collateral should be shown. Also, additional securityoffered should be disclosed in the “other” field. For Pledge of Shares, enter the amount andaccount number for share secured loans.23. Variable Rate – The definition of a variable rate loan for closed-end credit is any loan thatcan increase after consummation in a transaction not secured by the consumer’s principaldwelling. The Loan and Security Agreement was designed to handle all types of credit securedby personal property. There are many types of variable rate closed-end transactions and theygenerally fall into one of the following categories:a) Changes that follow an external index such as the Prime Rate, Treasury Bill Rates, EleventhDistrict Cost of Funds, Treasury Securities, etc. These are indexes that are set up by someagency or group other than the credit union and are generally published in The Wall StreetJournal, the financial pages of many local newspapers and the Federal Reserve StatisticalRelease and Federal Reserve Board Bulletin.b) Changes that follow an external index that are beyond the control of the credit union suchas the rate charged by another local financial institution; e.g., the fixed rate charged by XYZFinancial for 30-year fixed rate mortgages. These rates generally are not officially publishedlike the indices described in (a.) above, but they are beyond the control of the credit union.c) Changes that follow an internal index of the credit union. An example would be the creditunion’s rate on 6-month certificates or the dividend rate paid on share accounts.d) Changes in the rate that are based entirely on the discretion of the credit union’s board ofdirectors. At any particular time the board of directors can decide that the interest rate willchange on existing loans.Closed-End Consumer Lending User Guide 25

Page 1 instructions (continued)e) Changes that are tied to some event or occurrence. Common occurrences in credit unionloans which trigger an interest rate increase include: (a) when an employee leaves theemployment of the credit union, (b) discontinuing payroll deduction or automatic payment, (c)failure to maintain minimum account balances or (d) failure to maintain certain services.f) A renewable balloon payment when (1) the credit union is unconditionally obligated torenew the balloon payment loan at the consumer’s option or subject to conditions within theconsumer’s control and (2) the credit union has the option of increasing the interest rate atthe time of renewal of the balloon.REQUIRED DISCLOSURES FOR VARIABLE RATE LOANSThe following disclosures must appear in this section of the document:• The Circumstances Under Which the Rate May IncreaseSAMPLE LANGUAGE:The APR may increase during the term of this transaction if:[the prime interest rate of (creditor) increases.][the balance in your deposit account falls below $__________.][you terminate your employment with (employer).]• Any Limitation on the IncreaseSAMPLE LANGUAGE:[The interest rate will not increase above ______%.][The maximum interest rate increase at one time will be _____%.][The rate will not increase more than once every (time period).]• The Effect of an IncreaseSAMPLE LANGUAGE:Any increase will take the form of:[higher payment amounts.][more payments of the same amount.][a larger amount due at maturity.]• An Example of the Payment Terms that would Result from an IncreaseThe example must be either a standard example that illustrates the terms and conditions ofthe type of credit offered by the credit union or it may directly reflect the terms and conditionsof the particular transaction.In addition to the Truth in Lending Disclosures, you must also explain any other terms ofthe variable rate which are directly related. These include: the margin, interest rate floors,rounding of index values or payments.Closed-End Consumer Lending User Guide 26

Page 1 instructions (continued)24. Contract Reference – This is a statement per Regulation Z, Section 1026.18(p) that theconsumer should refer to the appropriate contract documents for information about nonpayment,default and prepayment penalties, and rebates.Signatures Section25. Signature Section – This area contains signature language that will vary on some documentsdue to state law variations.26. Borrower’s Signature – The borrower signs, or otherwise authenticates the Loan and SecurityAgreements and Disclosure Statement in this area. Additional signatures may be obtained usingthese areas. By signing, or otherwise authenticating as a borrower, a person is agreeing to theLoan and Security Agreements. If the owner of the property is not a borrower, the box “Owner ofProperty” should be checked. (This is the ONLY situation when this box should be checked.) Theowner of property is agreeing only to the terms of the Security Agreement. A witness may alsosign here. A witness signature is not required under the Truth in Lending Act.Closed-End Consumer Lending User Guide 27

Page 2 sample2731Credit Union Loan No. Acct. No.Borrower(s)ITEMIZATION OF THE AMOUNT FINANCEDItemization of Amount Financed of 28Amount Given to You Directly 29Amount Paid on Your Account 30Prepaid Finance Charge$ $$$Amounts Paid to Others on Your Behalf: (If an amount is marked with an asterisk (*) we will be retaining a portion of the amount.)$ To $To$To$To$ To$To$To$To$ To$To$To$To$ To$ToLOAN AGREEMENTIn this Loan Agreement ("Agreement") all references to "Credit Union," "we," "our," or "us," mean the Credit Union whose nameappears above and anyone to whom the Credit Union assigns or transfers this Agreement. All references to "you" or "your" mean eachperson who signs, or otherwise authenticates, this Agreement as a borrower.321. PROMISE TO PAY - You promise to pay $has been repaid. For fixed rate loans the interest rate isto the Credit Union plus interest on the unpaid balance until what you owe% per year.For variable rate loans the initial interest rate is % per year and will vary as follows:33Collection Costs:3435362. PAYMENTS - You promise to make payments of theamount and at the time shown in the Truth in LendingDisclosure. If this is a variable rate loan, the Promise to Paysection tells you whether, if the interest rate increases, youwill have to make more payments, higher payments, or ifthe final payment will be a balloon payment. You mayprepay any amount without penalty. If you prepay any partof what you owe, you are still required to make theregularly scheduled payments, unless we have agreed to achange in the payment schedule. Because this is a simpleinterest loan, if you do not make payments exactly asscheduled, your final payment may be more or less than theamount of the final payment that is disclosed. If you electvoluntary payment protection, we will either include thepremium or program fee in your payments or extend theterm of your loan. If the term is extended, you will berequired to make additional payments of the scheduledamount, until what you owe has been paid. You promise tomake all payments to the place we choose. If this loanrefinances another loan we have with you, the other loanwill be canceled and refinanced as of the date of this loan.Unless otherwise required by law, payments will be appliedto amounts owed in the manner we choose.3. LOAN PROCEEDS BY MAIL - If the proceeds of this loanare mailed to you, interest on this loan begins on the datethe loan proceeds are mailed to you.4. SECURITY FOR LOAN - This Agreement is secured by allproperty described in the "Security" section of the Truth inLending Disclosure. Property securing other loans you havewith us also secures this loan, unless the property is adwelling. In addition to your pledge of shares, we may alsohave what is known as a statutory lien on all individual andjoint accounts you have with us. A statutory lien means wehave the right under federal law and many state laws toclaim an interest in your accounts. We can enforce astatutory lien against your shares and dividends, and if any,interest and deposits, in all individual and joint accounts youhave with us to satisfy any outstanding financial obligationthat is due and payable to us. We may exercise our right toenforce this lien without further notice to you, to the extentpermitted by law. For all borrowers: You pledge as securityfor this loan all shares and dividends and, if any, all depositsand interest in all joint and individual accounts you havewith the Credit Union now and in the future. The statutorylien and/or your pledge will allow us to apply the funds inyour account(s) to what you owe when you are in default.The statutory lien and your pledge do not apply to anyIndividual Retirement Account or any other account thatwould lose special tax treatment under state or federal lawif given as security.5. DEFAULT - You will be in default under this Agreement ifyou do not make a payment of the amount required on orbefore the date it is due. You will be in default if you breakany promise you made in connection with this loan or ifanyone is in default under any security agreement made inconnection with this Agreement. You will be in default ifyou die, file for bankruptcy, become insolvent (that is,unable to pay your bills and loans as they become due), orif you made any false or misleading statements in your loanapplication. You will also be in default if something happensthat we believe may seriously affect your ability to repaywhat you owe under this Agreement or if you are in defaultunder any other loan agreement you have with us.6. ACTIONS AFTER DEFAULT - When you are in default,we may demand immediate payment of the entire unpaidbalance under this Agreement. You waive any right youhave to receive demand for payment, notice of intent todemand immediate payment and notice of demand forimmediate payment. If we demand immediate payment, youwill continue to pay interest at the rate provided for in thisAgreement, until what you owe has been repaid. We willalso apply against what you owe any shares and/or depositsgiven as security under this Agreement. We may alsoexercise any other rights given by law when you are indefault.3738NXX01A-eClosed-End Consumer Lending User Guide 28

Page 2 instructionsItemization of Amount Financed Section27. Itemization of Amount Financed – Enter amount the borrower financed per Regulation Z,Section 1026.18(c). This is the amount shown in the “Amount Financed” box.28. Amount Given to You Directly – Enter the amount of money given to the borrower in the formof cash or a check, as well as funds placed in an asset account. (Asset accounts include, but arenot limited to, share accounts, share draft accounts, etc.)Note: If a check is made out to the borrower and another party, this amount is to be included inthis box. You don’t have to show the other party in the section “Amounts Paid to Others on yourBehalf,” Regulation Z, Official Staff Interpretation, paragraph 18(c)(1)(i) - 1. Amounts paid toConsumer.29. Amount Paid on Your Account – This is the amount your credit union will use to pay offan existing loan balance. This section would include a payment of an existing loan balance(principal and accrued interest) on a prior loan. Only amounts paid to loan accounts should beshown here, Regulation Z, Section 1026.18(c)(1)(ii).30. Prepaid Finance Charge – Prepaid finance charges include any portion of the finance chargepaid prior to or at closing or settlement. They may be paid in cash or financed and withheldfrom the proceeds. Some common examples include: service fees, loan fees, loan guaranteeinsurance, credit report fees, residual value insurance and mandatory GAP coverage. Prepaidfinance charges are subtracted from the amount financed and added to the finance charge fordisclosure purposes. This will result in an APR that is different than the contractual interest rate.31. Amount Paid to Others on Your Behalf – These boxes are provided to disclose amountspaid to other persons by the credit union on the borrower’s behalf. These persons must beidentified by name except that payments to government agencies, public officials, credit reportagencies, appraisers and insurance companies may be generically identified with phrases like“credit bureau” or “state agency.” If loan checks are made payable to a third party only, and notthe borrower, the amount of the payment and the name of the third party must be disclosed,Regulation Z, Section 1026.18(c)(1)(iii).Note: The level rate or monthly renewable credit disability/credit life costs or amounts need notbe disclosed in this section.This section includes a sentence which reads as follows: If an amount is marked with anasterisk(*), we will be retaining a portion of the amount. An asterisk should be used wheneverthe borrower is financing a product for which the credit union imposes an “upcharge.” Typically,if the credit union sells mechanical repair coverage (MRC) or extended warranties and retainsa portion of the amount, then an asterisk will be needed. An example would be if the borrowerpurchased an extended warranty from the credit union. The warranty may cost the credit union$300.00, but the credit union charges the borrower $400.00. The $100.00 difference is an“upcharge” on this product. The credit union needs to disclose that it is retaining a portion of the$400.00 that is being charged to the borrower.Closed-End Consumer Lending User Guide 29

Page 2 instructions (continued)Loan Agreement Section32. Promise to Pay – This is the contractual promise to repay the principal loan amount plusinterest. Your credit union should put the note interest rate here as well as the principal amountborrowed. If this is a variable rate loan, the initial interest rate is entered here. The contractualinterest rate used to amortize the loan may be different than the APR if there are prepaid financecharges as part of the loan. If this is a variable rate loan you must also include the variable ratecontract language. The sample shows the fixed/variable promise to pay language. The fixedrate language is as follows: You promise to pay $______ to the credit union plus interest onthe unpaid balance until what you owe has been repaid. For fixed rate loans the interest rate is______% per year.33. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are to be disclosed. This language may be imprinted.34. Payments – This is the borrower’s promise to make payments as specified in the Truth in LendingDisclosure. This paragraph also discloses to the borrower that there is no prepayment penaltyand if payments are not made as scheduled, the final payment may be more or less than thefinal payment that was disclosed. Also, if voluntary payment protection is elected, the premium orprogram fees may be included in the payment or the loan term will be extended. If you are using afixed/variable note, this section would also contain information on the variable rate.35. Loan Proceeds By Mail – This is an explanation that interest begins on the date the loanproceeds are mailed, if this loan is transacted through the mail.36. Security For Loan – Regulation Z, Section 1026.18(m) requires that the creditor disclose thefact that it will acquire a security interest in the property purchased or in other property identifiedby item or type. The LOANLINER Loan Agreement discloses that the loan is secured by all itemsdescribed in the “Security” section of the Truth in Lending Disclosure.The loan also is secured by property securing other loans with the credit union, unless theproperty is a dwelling.Much of this section deals with a statutory lien. A statutory lien is applicable to federal andmany state-chartered credit unions. In 1999, NCUA issued regulations that required federalcredit unions to disclose statutory liens in a certain manner. If a borrower’s loan is in default,the statutory lien allows your credit union to apply the balance of shares and dividends in allindividual and joint accounts with your credit union to satisfy the obligation.There is also a general pledge of shares in this section, which allows your credit union to applythe funds in your borrower’s account(s) to what they owe when they are in default. This pledgeis considered additional security for all loans. The pledge does not apply to IRAs or any otheraccount that would lose special tax treatment under state or federal law if given as security. Aslong as your borrower is making payments and the loan is not share secured, your borrower hasaccess to his/her shares and/or deposits.Note: For state-chartered credit unions located in states where statutory liens are not allowed,the general pledge of shares would apply.Closed-End Consumer Lending User Guide 30

Page 2 instructions (continued)37. Default – This paragraph describes the elements of default and allows your credit union toaccelerate the unpaid balance in the event of default. The default language will vary by versiondue to state law requirements. Be sure to read this paragraph before deciding whether you cancall a loan in default. If you have questions, consult your legal counsel.38. Actions After Default – This section includes a statement allowing the credit union to acceleratethe unpaid balance in the event of default. If this paragraph gives the borrower a right to curethe default, be sure you comply with the applicable state law on timing and content of the Rightto Cure Notice. When a debt is accelerated, interest will continue on the unpaid balance atthe same rate. Lastly, your credit union may exercise any other rights given by law when yourborrower is in default.Closed-End Consumer Lending User Guide 31

Page 3 sample39404142Credit Union Loan No. Acct. No.Borrower(s)7. EACH PERSON RESPONSIBLE - Each person who signs,or otherwise authenticates, this Agreement will beindividually and jointly responsible for paying the entireamount owed under this Agreement. This means we canenforce our rights against any one of you individually oragainst all of you together.8. LATE CHARGE - If you are late in making a payment,you promise to pay the late charge shown in the Truth inLending Disclosure. If no late charge is shown, you will notbe charged one.9. DELAY IN ENFORCING RIGHTS - We can delay enforcingany of our rights under this Agreement any number of timeswithout losing the ability to exercise our rights later. Wecan enforce this Agreement against your heirs or legalrepresentatives.10. CONTINUED EFFECTIVENESS - If any part of thisAgreement is determined by a court to be unenforceable,the rest will remain in effect.LOAN AGREEMENT (continued)11. NOTICES - Notices will be sent to you at the most recentaddress you have given us in writing. Notice to any one ofyou will be notice to all.12. USE OF ACCOUNT - You promise to use your accountfor consumer (personal, family or household) purposes,unless the Credit Union gives you written permission to usethe account also for agricultural or commercial purposes, orto purchase real estate.13. NO ORAL AGREEMENTS -- THIS NOTE CONSTITUTESA "WRITTEN LOAN AGREEMENT" PURSUANT TOSECTION 26.02 OF THE TEXAS BUSINESS ANDCOMMERCE CODE, IF SUCH SECTION APPLIES. THISWRITTEN LOAN AGREEMENT REPRESENTS THE FINALAGREEMENT BETWEEN THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMP-ORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OFTHE PARTIES. THERE ARE NO UNWRITTEN ORALAGREEMENTS BETWEEN THE PARTIES.14. OTHER PROVISIONS -43444546NXX01A-eClosed-End Consumer Lending User Guide 32

Page 3 instructions39. Each Person Responsible – This paragraph explains that each person who signs, or otherwiseauthenticates the Loan Agreement will be held individually and jointly responsible for paying theentire amount owed under the Agreement.40. Late Charge – This paragraph explains that if your borrower is late in making a payment, theypromise to pay the late charge shown in the Truth in Lending Disclosure, if one is disclosed.41. Delay in Enforcing Rights – This statement provides that your credit union can delay enforcingany rights under this Agreement without losing the ability to exercise those rights later.42. Continued Effectiveness – This statement deems that if a court finds any part of the Agreementunenforceable, that the remainder of the Agreement remains in effect.43. Notices – This paragraph states that your credit union will send notices to the most recentaddress your borrower gave your credit union in writing and that notice to one is notice to all.44. Use of Account – This paragraph was added to the Loan Agreement due to the BankruptcyAbuse Prevention and Consumer Protection Act of 2005 (BAPCPA) which gave the credit unionprotection against court-ordered reduction (cramdown) of a secured balance due on purchasemoneysecured debt acquired for personal, family or household purposes. This provision willprove a vehicle was purchased for personal use.45. No Oral Agreements – This paragraph applies to Texas transactions and confirms that therights and obligations of the borrower and lender shall be determined solely from the writtenLoan Agreements and any prior oral agreements between the lender and borrower aresuperseded by the Loan Agreement.46. Other Provisions – This section allows your credit union some flexibility by adding specialprovisions such as governing law, demand feature language, lease-like language, or optionagreements.Closed-End Consumer Lending User Guide 33

Page 4 sample474849505152Credit Union Loan No. Acct. No.Borrower(s)SECURITY AGREEMENTIn this Agreement all references to "Credit Union," "we," "our" or"us" mean the Credit Union whose name appears on this documentand anyone to whom the Credit Union assigns or transfers thisAgreement. All references to the "Loan" mean the loan described inthe Loan Agreement that is part of this document. All references to"you" or "your" mean any person who signs, or otherwiseauthenticates, this Agreement.1. THE SECURITY FOR THE LOAN - You give us what is known as asecurity interest in the property described in the "Security" sectionof the Truth in Lending Disclosure that is part of this document ("theProperty"). The security interest you give includes all accessions.Accessions are things which are attached to or installed in theProperty now or in the future. The security interest also includes anyreplacements for the Property which you buy within 10 days of theLoan and any extensions, renewals or refinancings of the Loan. Italso includes any money you receive from selling the Property orfrom insurance you have on the Property. If the value of theProperty declines, you promise to give us more property as securityif asked to do so.2. WHAT THE SECURITY INTEREST COVERS/CROSS COLLATERALPROVISIONS - The security interest secures the Loan and anyextensions, renewals or refinancings of the Loan. The securityinterest also secures any other loans, including any credit card loan,you have now or receive in the future from us and any otheramounts you owe us for any reason now or in the future, exceptany loan secured by your principal dwelling. If the Property ishousehold goods as defined by the Federal Trade Commission CreditPractices Rule or your principal dwelling, the Property will secureonly this Loan and not other loans or amounts you owe us.3. OWNERSHIP OF THE PROPERTY - You promise that you own theProperty or, if this Loan is to buy the Property, you promise you willuse the Loan proceeds for that purpose. You promise that no oneelse has any interest in or claim against the Property that you havenot already told us about. You promise not to sell or lease theProperty or to use it as security for a loan with another creditor untilthe Loan is repaid. You promise you will allow no other securityinterest or lien to attach to the Property either by your actions or byoperation of law.4. PROTECTING THE SECURITY INTEREST - If your state issues atitle for the Property, you promise to have our security interestshown on the title. We may have to file what is called a financingstatement to protect our security interest from the claims of others.You irrevocably authorize us to execute (on your behalf), ifapplicable, and file one or more financing, continuation oramendment statements pursuant to the Uniform Commercial Code(UCC) in a form satisfactory to us. You promise to do whateverelse we think is necessary to protect our security interest in theProperty. You also promise to pay all costs, including but not limitedto any attorney fees, we incur in protecting our security interest andrights in the Property, to the extent permitted by applicable law.5. USE OF PROPERTY - Until the Loan has been paid off, youpromise you will: (1) Use the Property carefully and keep it in goodrepair. (2) Obtain our written permission before making majorchanges to the Property or changing the address where the Propertyis kept. (3) Inform us in writing before changing your address. (4)Allow us to inspect the Property. (5) Promptly notify us if theProperty is damaged, stolen or abused. (6) Not use the Property forany unlawful purpose. (7) Not retitle Property in another statewithout telling us.6. PROPERTY INSURANCE, TAXES AND FEES - You promise to payall taxes and fees (like registration fees) due on the Property and tokeep the Property insured against loss and damage. The amount andcoverage of the property insurance must be acceptable to us. Youmay provide the property insurance through a policy you alreadyhave, or through a policy you get and pay for. You promise to makethe insurance policy payable to us and to deliver the policy or proofof coverage to us if asked to do so.If you cancel your insurance and get a refund, we have a right to therefund. If the Property is lost or damaged, we can use the insurancesettlement to repair the Property or apply it towards what you owe.You authorize us to endorse any draft or check which may bepayable to you in order for us to collect any refund or benefits dueunder your insurance policy.If you do not pay the taxes or fees on the Property when due orkeep it insured, we may pay these obligations, but we are notrequired to do so. Any money we spend for taxes, fees or insurancewill be added to the unpaid balance of the Loan and you will payinterest on those amounts at the same rate you agreed to pay onthe Loan. We may receive payments in connection with theinsurance from a company which provides the insurance. We maymonitor our loans for the purpose of determining whether you andother borrowers have complied with the insurance requirements ofour loan agreements or may engage others to do so. The insurancecharge added to the Loan may include (1) the insurance company'spayments to us and (2) the cost of determining compliance with theinsurance requirements. If we add amounts for taxes, fees orinsurance to the unpaid balance of the Loan, we may increase yourpayments to pay the amount added within the term of theinsurance or term of the Loan.7. INSURANCE NOTICE - If you do not purchase the requiredproperty insurance, the insurance we may purchase and charge youfor will cover only our interest in the Property. The premium forthis insurance may be higher because the insurance company mayhave given us the right to purchase insurance after uninsuredcollateral is lost or damaged. The insurance will not be liabilityinsurance and will not satisfy any state financial responsibility or nofault laws.8. DEFAULT - You will be in default if you break any promise youmake or fail to perform any obligation you have under thisAgreement. You will also be in default under this Agreement if theLoan is in default. You will be in default if any property you havegiven us as security is repossessed by someone else, seized undera forfeiture or similar law, or if anything else happens thatsignificantly affects the value of the property or our securityinterest in it.9. WHAT HAPPENS IF YOU ARE IN DEFAULT - When you are indefault, we may demand immediate payment of the outstandingbalance of the Loan without giving you advance notice and takepossession of the Property. You agree the Credit Union has theright to take possession of the Property without judicial process ifthis can be done without breach of the peace. If we ask, youpromise to deliver the Property at a time and place we choose. Ifthe property is a motor vehicle or boat, you agree that we mayobtain a key or other device necessary to unlock and operate it,when you are in default. We will not be responsible for any otherproperty not covered by this Agreement that you leave inside theProperty or that is attached to the Property. We will try to returnthat property to you or make it available for you to claim.After we have possession of the Property, we can sell it and applythe money to any amounts you owe us. We will give you notice ofany public disposition or the date after which a private dispositionwill be held. Our expenses for taking possession of and selling theProperty will be deducted from the money received from the sale.Those costs may include the cost of storing the Property, preparingit for sale and attorney's fees to the extent permitted under statelaw or awarded under the Bankruptcy Code.If you have agreed to pay the Loan, you must pay any amount thatremains unpaid after the sale money has been applied to the unpaidbalance of the Loan and to what you owe under this Agreement.You agree to pay interest on that amount at the same rate as theLoan until that amount has been paid.10. DELAY IN ENFORCING RIGHTS AND CHANGES IN THE LOAN -We can delay enforcing any of our rights under this Agreement anynumber of times without losing the ability to exercise our rightslater. We can enforce this Agreement against your heirs or legalrepresentatives. If we change the terms of the Loan, you agree thatthis Agreement will remain in effect.11. CONTINUED EFFECTIVENESS - If any part of this Agreement isdetermined by a court to be unenforceable, the rest will remain ineffect.12. NOTICE TO NORTH DAKOTA BORROWERS PURCHASING AMOTOR VEHICLE - THE MOTOR VEHICLE IN THIS TRANSACTIONMAY BE SUBJECT TO REPOSSESSION. IF IT IS REPOSSESSEDAND SOLD TO SOMEONE ELSE, AND ALL AMOUNTS DUE TO THESECURED PARTY ARE NOT RECEIVED IN THAT SALE, YOU MAYHAVE TO PAY THE DIFFERENCE.13. NOTICE FOR ARIZONA OWNERS OF PROPERTY - It is unlawfulfor you to fail to return a motor vehicle that is subject to a securityinterest, within thirty days after you have received notice ofdefault. The notice will be mailed to the address you gave us. It isyour responsibility to notify us if your address changes. Themaximum penalty for unlawful failure to return a motor vehicle isone year in prison and/or a fine of $150,000.00.The following notice applies ONLY when the box at left is marked.14. NOTICE: ANY HOLDER OF THIS CONSUMER CREDITCONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSESWHICH THE DEBTOR COULD ASSERT AGAINST THESELLER OF GOODS OR SERVICES OBTAINED PURSUANTHERETO OR WITH THE PROCEEDS HEREOF. RECOVERYHEREUNDER BY THE DEBTOR SHALL NOT EXCEEDAMOUNTS PAID BY THE DEBTOR HEREUNDER.15. OTHER PROVISIONS -535455565758596061NXX01A-eClosed-End Consumer Lending User Guide 34

Page 4 instructionsSecurity Agreement Section47. The Security For the Loan – This paragraph grants your credit union a security interest inthe property described in the “Security” section of the Truth in Lending Disclosure. It is veryimportant that you thoroughly describe the collateral in the Truth in Lending Disclosure. It alsopermits your credit union a security interest in accessions, proceeds of the collateral and allowsyou to obtain additional collateral if the market value of the collateral declines.48. What the Security Interest Covers – This paragraph states that the property described in theTruth in Lending Disclosure secures this loan. The security for the loan will also be security forother debts with the credit union, now and in the future, unless the property is a dwelling. This isknown as a “cross-collateral” clause. However, if the property is household goods as defined byFederal Trade Commission Credit Practices Rule, the property can only secure this loan and notother loans or amounts owed to the credit union.49. Ownership of the Property – This paragraph describes the borrower’s ownership rights. Thisclause explains that a borrower can be considered in default if they sign the Security Agreementand they do not own the collateral shown in the “Security” section of the Truth in LendingDisclosure. It outlines that the borrower cannot sell the collateral or give anyone else a securityinterest in it until the debt has been paid, nor can they allow any other security interest or lien tobe attached to the property.50. Protecting the Security Interest – This paragraph requires the borrower to promise to assistthe credit union in any way to protect the security interest. It also requires the borrower toidentify your credit union as lien holder on the title and requires the borrower to sign a financingstatement, if necessary.51. Use of Property – This paragraph outlines the responsibilities of the borrower to maintain thecollateral.52. Property Insurance, Taxes and Fees – This paragraph contains information about taxes, feesand property insurance on the collateral. The borrower is required to pay all taxes and feesplus insure the property and name the credit union as loss payee on an insurance policy. Anyamounts spent by your credit union on taxes, fees or property insurance can be added to theloan balance and be subject to interest at the same rate as the original loan. Your credit unionhas the option of increasing the borrower’s payment to the extent necessary to repay the loan inthe original scheduled term or extend the term of the loan to repay these amounts.53. Insurance Notice – This paragraph states that if your borrower does not purchase propertyinsurance, your credit union can purchase and charge your borrower for insurance that coversonly your credit union’s interest in the property.54. Default – Article 9 of the Uniform Commercial Code (UCC) does not define default, so thecontract must define this term. Default is defined as breaking any promise or failing to performany obligation under this Security Agreement or the LOANLINER Loan and Security Agreementsand Disclosure Statement.Closed-End Consumer Lending User Guide 35

Page 4 instructions (continued)55. What Happens if you are in Default – This paragraph describes your credit union’s rights if theproperty is in default. It gives your credit union the right to accelerate the debt and repossess thecollateral upon default. It establishes the right to sell the repossessed property and to pass anycosts involved onto your borrowers. Lastly, it requires your borrower to pay any remaining loanbalance after the sale money has been applied. If you are required to give the borrower a right tocure the default, be sure to follow state law requirements on the timing and content of the notice.56. Delay in Enforcing Rights and Changes in the Loan – This statement provides that yourcredit union can delay enforcing any rights under this Agreement without losing the ability toexercise those rights later.57. Continued Effectiveness – This statement deems that if a court finds any part of the Agreementunenforceable, the remainder of the Agreement is still in effect.58. Notice to North Dakota Borrowers Purchasing a Motor Vehicle – This paragraph states thata motor vehicle may be subject to repossession for North Dakota borrowers. This notice will onlyappear on the document used for North Dakota borrowers.59. Notice for Arizona Owners of Property – This paragraph describes responsibilities for Arizonaowners of property when in default on a motor vehicle. This notice will only appear on thedocument used for Arizona borrowers.60. Consumers’ Claims and Defenses Notice – Whenever your credit union is selling arepossessed vehicle and financing it, the checkbox for the “Consumers’ Claims and DefensesNotice” should be checked. The Consumers’ Claims and Defenses Notice may also be requiredin other situation where the credit union has a business relationship with the seller of goods.61. Other Provisions – This section allows your credit union some flexibility by adding specialprovisions such as governing law, demand feature language, lease-like language, or optionagreements.Closed-End Consumer Lending User Guide 36

Chapter 4:Dwelling Fixed Loan and Security Agreements andDisclosure StatementDocument Description – Electronic formatWhen Used:Purpose:DocumentNumber:How distributed:State-specificversions:This document is used when a borrower has been approved for a fixedrate closed-end loan secured by a dwelling that is personal property(such as a mobile home in a park).The Loan and Security Agreements and Disclosure Statement provide:1. disclosures required by Regulation Z2. contract terms between the credit union and the borrower(s)All Truth in Lending disclosures are given in the “Fed Box” area. TheLoan Agreement and Security Agreement are separate agreements.NXX04*A copy of this document must be given to a borrower (if joint borrowers,only one needs to receive a copy).Florida, Iowa, Louisiana, New Hampshire, Right to Cure, Virginia andWisconsin*Indicates spaceholder for version numberClosed-End Consumer Lending User Guide 37

Page 1 sample1LOAN DATE2NAME AND ADDRESSLOAN NUMBERBORROWER 13ACCOUNT NUMBER4Loan and Security Agreementsand Disclosure StatementGROUP POLICY NUMBERBORROWER 2NAME (AND ADDRESS IF DIFFERENT FROM BORROWER 1)5MATURITY DATE67TRUTH IN LENDING DISCLOSURE 'e' means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGE Amount Financed Total of Payments Total Sale PriceThe cost of your credit as a yearly rate. The dollar amount the The amount of credit The amount you will have The total cost of your purchase on credit iscredit will cost you. provided to you or on paid after you have madeyour behalf.all payments as scheduled.$8 %$ 9$10 $ 11which includes yourdownpayment of $ 12 .INTEREST RATE AND PAYMENT SUMMARYPrepayment: If you pay off early you will not have topay a penalty.18Rate & Monthly Payment Required Deposit: The Annual Percentage Rate doesnot take into account your required deposit, if any.Interest Rate1319%Principal + Interest Payment$ 14Property Insurance: You may obtain propertyinsurance from anyone you want that is acceptable tothe Credit Union. If you get the insurance from us,Est. Taxes + Insurance (Escrow)you will pay $(Includes Private Mortgage Insurance)$ 1520Assumption: Someone buying your dwelling cannotTotal Est. Monthly Payment$ 16assume the remainder of the loan on theterms. 21originalThere is no guarantee that you will be able to refinance to lower your Filing FeesNon-Filing Insurancerate and payments.$22$23Balloon Payment (Check if applicable) 17 Final Balloon Payment due $Late Charge:24Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in yourshares and dividends and, if any, your deposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/Make Year I.D. Number Type ValueKey Number$$25$Other (Describe)Pledge of Shares $in Account No.$ in Account No.See your contract documents for any additional information about nonpayment, default, and any required repayment in full before thescheduled date.26SIGNATURES27By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property isdescribed in the "Security" section of the Truth in Lending Disclosure, you also agree to the terms of the SecurityAgreement. If you sign, or otherwise authenticate, as "Owner of Property" you agree only to the terms of the SecurityAgreement.CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.Borrower 1 SignatureX(Seal)DateBorrower 2 SignatureX(Seal)Date28SignatureX(Seal)DateSignatureX(Seal)DateOther Borrower Owner of Property WitnessOther Borrower Owner of Property WitnessCUNA Mutual Group 2011 All Rights ReservedNXX042-eClosed-End Consumer Lending User Guide 38

Page 1 instructionsPlease refer to the document on the preceding pages for the corresponding numbers.1. Credit Union Information – This space is used to identify the credit union as required byRegulation Z, Section 1026.18(a). Have your data processor set up your credit union’s name,address, telephone number and logo to print.2. Loan Date – Date of current loan.3. Loan Number – Loan identification number as defined by the credit union.4. Account Number – Member account number.5. Group Policy Number – Enter the credit union’s contract number as defined by CUNA MutualGroup.6. Maturity Date – Enter maturity date of loan.7. Borrower 1 Name and Address/Borrower 2 Name and Address – Name and address of eachborrower.Truth in Lending Disclosure SectionThe Truth in Lending Act requires certain disclosures be segregated from other information on aclosed-end lending document per Regulation Z, Section 1026.17(a). The area labeled “Truth inLending Disclosure” is referred to as the “Fed Box.” The Truth in Lending Disclosure contains thefollowing items:8. Annual Percentage Rate – Your credit union completes the APR for the loan requested,Regulation Z, Sections 1026.18(e) and 1026.22.Note: The APR will be the simple interest rate when the only finance charge is interest. If financecharges other than interest are to be included, the APR will be different than the simple interestrate and must be calculated using a calculation device sufficiently sophisticated to correctlycompute the correct APR. Examples of finance charges on consumer loans include:a) credit report feesb) loan processing feesc) mandatory residual value insurance (RVI)d) mandatory GAP coverage9. Finance Charge – Your credit union completes the total finance charge for the loan as requiredby Regulation Z, Section 1026.18(d).Note: Any prepaid finance charge should be included in this amount. Do not put an ‘e’ forestimate in this box. The Disclosure should be completed with the total finance charge known atthe time of disclosure.Closed-End Consumer Lending User Guide 39

Page 1 instructions (continued)10. Amount Financed – Regulation Z, Section 1026.18(b) requires that the amount financed becalculated in the following way:a) Start with the principal loan amount.b) Add other amounts that are financed by the lender and are not part of the finance charge.Level rate and monthly renewable credit insurance is not financed; therefore, the cost forthis insurance should not be included in the “Amount Financed” section. Single premiuminsurance is financed and will be included in this amount.c) Subtract any prepaid finance charge.11. Total of Payments – The sum of the payments for the loan, Regulation Z, Section 1026.18(h).The total payments will be based on the contractual payment shown in paragraph one of theNote.12. Total Sales Price – Regulation Z, Section 1026.18(j) requires this disclosure be used wheneveryour credit union is both the seller and the creditor. This is most likely to happen when you areselling a repossessed vehicle. In this section you must disclose both the total sale price and thedownpayment amount, if any.The total sale price is the sum of the:a) cash priceb) amounts that are financed but not finance chargesc) finance charge13. Interest Rate – Regulation Z, Section 1026.18(s)(2)(i)(A) requires the disclosure of the interestrate at consummation.14. Principal + Interest Payment – Section 1026.18(s)(3)(i)(A) states if all periodic payments areapplied to accrued interest and principal, then the corresponding periodic principal and interestpayment is to be disclosed.15. Estimated Taxes + Insurance (Escrow) (Includes Private Mortgage Insurance) – RegulationZ, Section 1026.18(s)(3)(i)(C) states that if an escrow account is required, an estimate of theamount of taxes and insurance, including any mortgage insurance, is to be provided.16. Total Estimate Monthly Payment – Regulation Z, Section 1026.18(s)(3)(i)(D) requires the sumof the amounts above disclosed as Total Estimated Monthly Payment. This figure cannot includeany credit insurance or debt protection amounts.17. Balloon Payment – Regulation Z, Section 1026.18(s)(5)(i) states that if the transaction requiresa balloon payment, the due date and balloon payment amount need to be disclosed outside thetable.18. Prepayment – Regulation Z, Section 1026.18(k) requires disclosure of any prepayment penalty.The language in the LOANLINER documents prohibits a prepayment penalty.19. Required Deposit – Per Regulation Z, Section 1026.18(r) and footnote 45, this language isrequired when the borrower must maintain a deposit as a condition of the loan.Closed-End Consumer Lending User Guide 40

Page 1 instructions (continued)20. Property Insurance – If your credit union sells property insurance, enter the amount of theinsurance premium. The term of the insurance must also be disclosed if it is less than the term ofthe loan, Regulation Z, Section 1026.18(n).21. Assumption – Since most credit unions do not allow loans to be assumed, this statementinforms the borrowers that the loan cannot be assumed. Regulation Z, Section 1026.18(q).22. Filing Fees – If you pass on the cost of filing fees (for example, a lien filing fee) to borrowers,whether directly or indirectly, you must disclose the cost — even if the borrower pays the fee incash to the credit union or a third party. This fee is not a finance charge if you only pass on theactual cost charged by government officials, Regulation Z, Section 1026.18(o).23. Non-Filing Insurance – Enter the dollar amount of the non-filing insurance. This insurancepremium is used to perfect the lien in lieu of actually filing the security interest, Regulation Z,Section 1026.18(o).24. Late Charge – The late charge is any dollar or percentage charge that may be imposed beforematurity due to a late payment. This language is provided by the credit union and may be printedon the documents, Regulation Z, Section 1026.18(l).25. Security – The statement “Collateral securing other loans with the credit union may alsosecure this loan” is printed to disclose the existence of a cross-collateral clause in the SecurityAgreement. The statement “You are giving a security interest in your shares and dividends and,if any, your deposits and interest in the credit union; and the property described below:” disclosesthat shares/deposits are also offered to secure the loan. The description of the collateral mustbe included here since this portion of the Truth in Lending Disclosure also is part of the SecurityAgreement. A complete description of collateral should be shown. Also, additional securityoffered should be disclosed in the “other” field. For Pledge of Shares, enter the amount andaccount number for share secured loans.26. Contract Reference – This is a statement per Regulation Z, Section 1026.18(p) that theconsumer should refer to the appropriate contract documents for information about nonpayment,default and prepayment penalties, and rebates.Signatures Section27. Signature Section – This area contains signature language that will vary on some documentsdue to state law variations.28. Borrower’s Signature – The borrower signs, or otherwise authenticates the Loan and SecurityAgreements and Disclosure Statement in this area. Additional signatures may be obtained usingthese areas. By signing, or otherwise authenticating as a borrower, a person is agreeing to theLoan and Security Agreements. If the owner of the property is not a borrower, the box “Owner ofProperty” should be checked. (This is the ONLY situation when this box should be checked.) Theowner of property is agreeing only to the terms of the Security Agreement. A witness may alsosign here. A witness signature is not required under the Truth in Lending Act.Closed-End Consumer Lending User Guide 41

Page 2 sampleCredit Union Loan No. Acct. No.Borrower(s)ITEMIZATION OF THE AMOUNT FINANCEDItemization of Amount Financed of Amount Given to You Directly Amount Paid on Your Account Prepaid Finance Charge$ 29$ 30 $ 31$ 32Amounts Paid to Others on Your Behalf: (If an amount is marked with an asterisk (*) we will be retaining a portion of the amount.)$ To $To$To33$To$ To$To$To$To$ To$To$To$To$ To$ToLOAN AGREEMENTIn this Loan Agreement ("Agreement") all references to "Credit Union," "we," "our," or "us," mean the Credit Union whose nameappears above and anyone to whom the Credit Union assigns or transfers this Agreement. All references to "you" or "your" mean eachperson who signs, or otherwise authenticates, this Agreement as a borrower.34 1. PROMISE TO PAY - You promise to pay $ to the Credit Union plus interest on the unpaid balance until what you owehas been repaid. The interest rate is % per year. You will pay principal and interest by making payments each month. Yourinitial monthly payment will be in the amount of U.S. $ . You will make payments on the day of each monthbeginning on. You will make these payments every month until you have paid all of the principal and interest and any othercharges, described below, that you may owe under this Note. If, on, you still owe amounts under this Note, you will payall amounts in full on that date.35 Collection Costs:36 2. PAYMENTS - If you elect voluntary payment protection, we will happens that we believe may seriously affect your ability to repayinclude the premium or program fee in your payments. If you what you owe under this Agreement or if you are in default undersubsequently elect voluntary payment protection, we will either any other loan agreement you have with us.include the premium or program fee in your payments or extend 6. ACTIONS AFTER DEFAULT - When you are in default, we may 40the term of your loan. If the term is extended, you will be required demand immediate payment of the entire unpaid balance under thisto make additional payments of the scheduled amount, until what Agreement. You waive any right you have to receive demand foryou owe has been paid. You may prepay any amount without payment, notice of intent to demand immediate payment and noticepenalty. If you prepay any part of what you owe, you are still of demand for immediate payment. If we demand immediaterequired to make the regularly scheduled payments, unless we payment, you will continue to pay interest at the rate provided for inhave agreed to a change in the due date. Because this is a simple this Agreement, until what you owe has been repaid. We will alsointerest loan, if you do not make payments exactly on the due apply against what you owe any shares and/or deposits given asdate, your final payment may be more or less than the amount of security under this Agreement. We may also exercise any otherthe final payment that is disclosed. You promise to make all rights given by law when you are in default.payments to the place we choose. If this loan refinances another 7. EACH PERSON RESPONSIBLE - Each person who signs, or 41loan we have with you, the other loan will be canceled and otherwise authenticates, this Agreement will be individually andrefinanced as of the date of this loan. Unless otherwise required jointly responsible for paying the entire amount owed under thisby law, payments will be applied to amounts owed in the manner Agreement. This means we can enforce our rights against any onewe choose.of you individually or against all of you together.37 3. LOAN PROCEEDS BY MAIL - If the proceeds of this loan are 8. LATE CHARGE - If you are late in making a payment, you 42mailed to you, interest on this loan begins on the date the loan promise to pay the late charge shown in the Truth in Lendingproceeds are mailed to you.Disclosure. If no late charge is shown, you will not be charged one.38 4. SECURITY FOR LOAN - This Agreement is secured by all 9. DELAY IN ENFORCING RIGHTS - We can delay enforcing any of 43property described in the "Security" section of the Truth in Lending our rights under this Agreement any number of times without losingDisclosure. Property securing other loans you have with us also the ability to exercise our rights later. We can enforce thissecures this loan, unless the property is a dwelling. In addition to Agreement against your heirs or legal representatives.your pledge of shares, we may also have what is known as a 10. CONTINUED EFFECTIVENESS - If any part of this Agreement is 44statutory lien on all individual and joint accounts you have with us. determined by a court to be unenforceable, the rest will remain inA statutory lien means we have the right under federal law and effect.many state laws to claim an interest in your accounts. We can 11. NOTICES - Notices will be sent to you at the most recent 45enforce a statutory lien against your shares and dividends, and if address you have given us in writing. Notice to any one of you willany, interest and deposits, in all individual and joint accounts you be notice to all.have with us to satisfy any outstanding financial obligation that is 12. USE OF ACCOUNT - You promise to use your account fordue and payable to us. We may exercise our right to enforce this consumer (personal, family or household) purposes, unless the46lien without further notice to you, to the extent permitted by law. Credit Union gives you written permission to use the account alsoFor all borrowers: You pledge as security for this loan all shares for agricultural or commercial purposes, or to purchase real estate.and dividends and, if any, all deposits and interest in all joint and 13. NO ORAL AGREEMENTS -- THIS NOTE CONSTITUTES A 47individual accounts you have with the Credit Union now and in the "WRITTEN LOAN AGREEMENT" PURSUANT TO SECTION 26.02future. The statutory lien and/or your pledge will allow us to apply OF THE TEXAS BUSINESS AND COMMERCE CODE, IF SUCHthe funds in your account(s) to what you owe when you are indefault. The statutory lien and your pledge do not apply to anySECTION APPLIES. THIS WRITTEN LOAN AGREEMENTIndividual Retirement Account or any other account that would REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIESlose special tax treatment under state or federal law if given as AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,security.CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF39 5. DEFAULT - You will be in default under this Agreement if you THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTSdo not make a payment of the amount required on or before the BETWEEN THE PARTIES.date it is due. You will be in default if you break any promise youmade in connection with this loan or if anyone is in default under 14. OTHER PROVISIONS -48any security agreement made in connection with this Agreement.You will be in default if you die, file for bankruptcy, becomeinsolvent (that is, unable to pay your bills and loans as theybecome due), or if you made any false or misleading statements inyour loan application. You will also be in default if somethingNXX042-eClosed-End Consumer Lending User Guide 42

Page 2 instructionsItemization of Amount Financed Section29. Itemization of Amount Financed – Enter amount the borrower financed per Regulation Z,Section 1026.18(c). This is the amount shown in the “Amount Financed” box.30. Amount Given to You Directly – Enter the amount of money given to the borrower in the formof cash or a check, as well as funds placed in an asset account. (Asset accounts include, but arenot limited to, share accounts, share draft accounts, etc.)Note: If a check is made out to the borrower and another party, this amount is to be included inthis box. You don’t have to show the other party in the section “Amounts Paid to Others on yourBehalf,” Regulation Z, Official Staff Interpretation, paragraph 18(c)(1)(i) - 1. Amounts paid toConsumer.31. Amount Paid on Your Account – This is the amount your credit union will use to pay offan existing loan balance. This section would include a payment of an existing loan balance(principal and accrued interest) on a prior loan. Only amounts paid to loan accounts should beshown here, Regulation Z, Section 1026.18(c)(1)(ii).32. Prepaid Finance Charge – Prepaid finance charges include any portion of the finance chargepaid prior to or at closing or settlement. They may be paid in cash or financed and withheldfrom the proceeds. Some common examples include: service fees, loan fees, loan guaranteeinsurance, credit report fees, residual value insurance and mandatory GAP coverage. Prepaidfinance charges are subtracted from the amount financed and added to the finance charge fordisclosure purposes. This will result in an APR that is different than the contractual interest rate.33. Amount Paid to Others on Your Behalf – These boxes are provided to disclose amountspaid to other persons by the credit union on the borrower’s behalf. These persons must beidentified by name except that payments to government agencies, public officials, credit reportagencies, appraisers and insurance companies may be generically identified with phrases like“credit bureau” or “state agency.” If loan checks are made payable to a third party only, and notthe borrower, the amount of the payment and the name of the third party must be disclosed,Regulation Z, Section 1026.18(c)(1)(iii).Note: The level rate or monthly renewable credit disability/credit life costs or amounts need notbe disclosed in this section.This section includes a sentence which reads as follows: If an amount is marked with anasterisk(*), we will be retaining a portion of the amount. An asterisk should be used wheneverthe borrower is financing a product for which the credit union imposes an “upcharge.” Typically,if the credit union sells mechanical repair coverage (MRC) or extended warranties and retainsa portion of the amount, then an asterisk will be needed. An example would be if the borrowerpurchased an extended warranty from the credit union. The warranty may cost the credit union$300.00, but the credit union charges the borrower $400.00. The $100.00 difference is an“upcharge” on this product. The credit union needs to disclose that it is retaining a portion of the$400.00 that is being charged to the borrower.Closed-End Consumer Lending User Guide 43

Page 2 instructions (continued)Loan Agreement Section34. Promise to Pay – This is the contractual promise to repay the principal loan amount plusinterest. Your credit union should enter the principal amount borrowed and when paymentsare due in the promise to pay. The contractual interest rate used to amortize the loan may bedifferent than the APR if there are prepaid finance charges as part of the loan.35. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are to be disclosed. This language may be imprinted.36. Payments – This is the borrower’s promise to make payments as specified in the Truth inLending Disclosure. This paragraph also discloses to the borrower that there is no prepaymentpenalty and if payments are not made as scheduled, the final payment may be more or lessthan the final payment that was disclosed. Also, if voluntary payment protection is elected, thepremium or program fees may be included in the payment or the loan term will be extended.37. Loan Proceeds By Mail – This is an explanation that interest begins on the date the loanproceeds are mailed, if this loan is transacted through the mail.38. Security For Loan – Regulation Z, Section 1026.18(m) requires that the creditor disclose thefact that it will acquire a security interest in the property purchased or in other property identifiedby item or type. The LOANLINER Loan Agreement discloses that the loan is secured by all itemsdescribed in the “Security” section of the Truth in Lending Disclosure.The loan also is secured by property securing other loans with the credit union.Much of this section deals with a statutory lien. A statutory lien is applicable to federal andmany state-chartered credit unions. In 1999, NCUA issued regulations that required federalcredit unions to disclose statutory liens in a certain manner. If a borrower’s loan is in default,the statutory lien allows your credit union to apply the balance of shares and dividends in allindividual and joint accounts with your credit union to satisfy the obligation.There is also a general pledge of shares in this section, which allows your credit union to applythe funds in your borrower’s account(s) to what they owe when they are in default. This pledgeis considered additional security for all loans. The pledge does not apply to IRAs or any otheraccount that would lose special tax treatment under state or federal law if given as security. Aslong as your borrower is making payments and the loan is not share secured, your borrower hasaccess to his/her shares and/or deposits.Note: For state-chartered credit unions located in states where statutory liens are not allowed,the general pledge of shares would apply.39. Default – This paragraph describes the elements of default and allows your credit union toaccelerate the unpaid balance in the event of default. The default language will vary by versiondue to state law requirements. Be sure to read this paragraph before deciding whether you cancall a loan in default. If you have questions, consult your legal counsel.Closed-End Consumer Lending User Guide 44

Page 2 instructions (continued)40. Actions After Default – This section includes a statement allowing the credit union to acceleratethe unpaid balance in the event of default. If this paragraph gives the borrower a right to curethe default, be sure you comply with the applicable state law on timing and content of the Rightto Cure Notice. When a debt is accelerated, interest will continue on the unpaid balance atthe same rate. Lastly, your credit union may exercise any other rights given by law when yourborrower is in default.41. Each Person Responsible – This paragraph explains that each person who signs, or otherwiseauthenticates the Loan Agreement will be held individually and jointly responsible for paying theentire amount owed under the Agreement.42. Late Charge – This paragraph explains that if your borrower is late in making a payment, theypromise to pay the late charge shown in the Truth in Lending Disclosure, if one is disclosed.43. Delay in Enforcing Rights – This statement provides that your credit union can delay enforcingany rights under this Agreement without losing the ability to exercise those rights later.44. Continued Effectiveness – This statement deems that if a court finds any part of the Agreementunenforceable, that the remainder of the Agreement remains in effect.45. Notices – This paragraph states that your credit union will send notices to the most recentaddress your borrower gave your credit union in writing and that notice to one is notice to all.46. Use of Account – This paragraph was added to the Loan Agreement due to the BankruptcyAbuse Prevention and Consumer Protection Act of 2005 (BAPCPA) which gave the credit unionprotection against court-ordered reduction (cramdown) of a secured balance due on purchasemoneysecured debt acquired for personal, family or household purposes. This provision willprove a vehicle was purchased for personal use.47. No Oral Agreements – This paragraph applies to Texas transactions and confirms that the rightsand obligations of the borrower and lender shall be determined solely from the written LoanAgreements and any prior oral agreements between the lender and borrower are superseded bythe Loan Agreement.48. Other Provisions – This section allows your credit union some flexibility by adding specialprovisions such as governing law, demand feature language, lease-like language, or optionagreements.Closed-End Consumer Lending User Guide 45

To create these samples, pull the pdf into an InDesign file and add the circles to a seperate layer. Now make a high res pdf ofthe form with circle numbers to use as a graphic for the manual. (maz)Page 3 sampleCredit Union Loan No. Acct. No.Borrower(s)SECURITY AGREEMENTIn this Agreement all references to "Credit Union," "we," "our" or payments to us and (2) the cost of determining compliance with the"us" mean the Credit Union whose name appears on this insurance requirements. If we add amounts for taxes, fees ordocument and anyone to whom the Credit Union assigns or insurance to the unpaid balance of the Loan, we may increase yourtransfers this Agreement. All references to the "Loan" mean the payments to pay the amount added within the term of the insuranceloan described in the Loan Agreement that is part of this or term of the Loan.document. All references to "you" or "your" mean any person who 7. INSURANCE NOTICE - If you do not purchase the required 55signs, or otherwise authenticates, this Agreement.property insurance, the insurance we may purchase and charge you49 1. THE SECURITY FOR THE LOAN - You give us what is known as for will cover only our interest in the Property. The premium for thisa security interest in the property described in the "Security" insurance may be higher because the insurance company may havesection of the Truth in Lending Disclosure that is part of this given us the right to purchase insurance after uninsured collateral isdocument ("the Property"). The security interest you give includes lost or damaged. The insurance will not be liability insurance andall accessions. Accessions are things which are attached to or will not satisfy any state financial responsibility or no fault laws.installed in the Property now or in the future. The security interest 8. DEFAULT - You will be in default if you break any promise you 56also includes any replacements for the Property which you buy make or fail to perform any obligation you have under thiswithin 10 days of the Loan and any extensions, renewals or Agreement. You will be in default if any property you have given usrefinancings of the Loan. It also includes any money you receive as security is repossessed by someone else, seized under afrom selling the Property or from insurance you have on the forfeiture or similar law, or if anything else happens thatProperty. If the value of the Property declines, you promise to give significantly affects the value of the property or our securityus more property as security if asked to do so.interest in it. You will also be in default under this Agreement if the50 2. WHAT THE SECURITY INTEREST COVERS/CROSS Loan is in default.COLLATERAL PROVISIONS - The security interest secures the 9. WHAT HAPPENS IF YOU ARE IN DEFAULT - When you are in 57Loan and any extensions, renewals or refinancings of the Loan. If default, we may demand immediate payment of the outstandingthe Property is not a dwelling, the security interest also secures balance of the Loan without giving you advance notice and takeany other loans, including any credit card loan, you have now or possession of the Property. You agree the Credit Union has the rightreceive in the future from us and any other amounts you owe us to take possession of the Property without judicial process if thisfor any reason now or in the future, except any loan secured by can be done without breach of the peace. If we ask, you promise toyour principal residence. If the Property is household goods as deliver the Property at a time and place we choose. If the propertydefined by the Federal Trade Commission Credit Practices Rule or is a motor vehicle or boat, you agree that we may obtain a key oryour principal residence, the Property will secure only this Loan other device necessary to unlock and operate it, when you are inand not other loans or amounts you owe us.default. We will not be responsible for any other property not51 3. OWNERSHIP OF THE PROPERTY - You promise that you own covered by this Agreement that you leave inside the Property orthe Property or, if this Loan is to buy the Property, you promise that is attached to the Property. We will try to return that propertyyou will use the Loan proceeds for that purpose. You promise that to you or make it available for you to claim.no one else has any interest in or claim against the Property that After we have possession of the Property, we can sell it and applyyou have not already told us about. You promise not to sell or the money to any amounts you owe us. We will give you notice oflease the Property or to use it as security for a loan with another any public disposition or the date after which a private dispositioncreditor until the Loan is repaid. You promise you will allow no will be held. Our expenses for taking possession of and selling theother security interest or lien to attach to the Property either by Property will be deducted from the money received from the sale.your actions or by operation of law.Those costs may include the cost of storing the Property, preparing52 4. PROTECTING THE SECURITY INTEREST - If your state issues a it for sale and attorney's fees to the extent permitted under statetitle for the Property, you promise to have our security interest law or awarded under the Bankruptcy Code.shown on the title. We may have to file what is called a financing If you have agreed to pay the Loan, you must pay any amount thatstatement to protect our security interest from the claims of remains unpaid after the sale money has been applied to the unpaidothers. You irrevocably authorize us to execute (on your behalf), if balance of the Loan and to what you owe under this Agreement.applicable, and file one or more financing, continuation or You agree to pay interest on that amount at the same rate as theamendment statements pursuant to the Uniform Commercial Code Loan until that amount has been paid.(UCC) in a form satisfactory to us. You promise to do whatever 10. DELAY IN ENFORCING RIGHTS AND CHANGES IN THE LOAN - 58else we think is necessary to protect our security interest in the We can delay enforcing any of our rights under this Agreement anyProperty. You also promise to pay all costs, including but not number of times without losing the ability to exercise our rightslimited to any attorney fees, we incur in protecting our security later. We can enforce this Agreement against your heirs or legalinterest and rights in the Property, to the extent permitted by representatives. If we change the terms of the Loan, you agree thatapplicable law.this Agreement will remain in effect.53 5. USE OF PROPERTY - Until the Loan has been paid off, you 11. CONTINUED EFFECTIVENESS - If any part of this Agreement is 59promise you will: (1) Use the Property carefully and keep it in good determined by a court to be unenforceable, the rest will remain inrepair. (2) Obtain our written permission before making major effect.changes to the Property or changing the address where the 12. NORTH DAKOTA NOTICE TO BORROWERS PURCHASING A 60Property is kept. (3) Inform us in writing before changing your MOTOR VEHICLE - THE MOTOR VEHICLE IN THIS TRANSACTIONaddress. (4) Allow us to inspect the Property. (5) Promptly notify MAY BE SUBJECT TO REPOSSESSION. IF IT IS REPOSSESSEDus if the Property is damaged, stolen or abused. (6) Not use the AND SOLD TO SOMEONE ELSE, AND ALL AMOUNTS DUE TO THEProperty for any unlawful purpose. (7) Not retitle Property in SECURED PARTY ARE NOT RECEIVED IN THAT SALE, YOU MAYanother state without telling us.HAVE TO PAY THE DIFFERENCE.54 6. PROPERTY INSURANCE, TAXES AND FEES - You promise to 13. NOTICE FOR ARIZONA OWNERS OF PROPERTY - It is unlawful 61pay all taxes and fees (like registration fees) due on the Property for you to fail to return a motor vehicle that is subject to a securityand to keep the Property insured against loss and damage. The interest, within thirty days after you have received notice of default.amount and coverage of the property insurance must be The notice will be mailed to the address you gave us. It is youracceptable to us. You may provide the property insurance through responsibility to notify us if your address changes. The maximuma policy you already have, or through a policy you get and pay for. penalty for unlawful failure to return a motor vehicle is one year inYou promise to make the insurance policy payable to us and to prison and/or a fine of $150,000.00.deliver the policy or proof of coverage to us if asked to do so. The following notice applies ONLY when the box at left is marked.If you cancel your insurance and get a refund, we have a right tothe refund. If the Property is lost or damaged, we can use the 14. NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT 62insurance settlement to repair the Property or apply it towards CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSESwhat you owe. You authorize us to endorse any draft or check WHICH THE DEBTOR COULD ASSERT AGAINST THEwhich may be payable to you in order for us to collect any refund SELLER OF GOODS OR SERVICES OBTAINED PURSUANTor benefits due under your insurance policy.HERETO OR WITH THE PROCEEDS HEREOF. RECOVERYIf you do not pay the taxes or fees on the Property when due orkeep it insured, we may pay these obligations, but we are notHEREUNDER BY THE DEBTOR SHALL NOT EXCEEDrequired to do so. Any money we spend for taxes, fees or AMOUNTS PAID BY THE DEBTOR HEREUNDER.insurance will be added to the unpaid balance of the Loan and you 15. OTHER PROVISIONS -63will pay interest on those amounts at the same rate you agreed topay on the Loan. We may receive payments in connection with theinsurance from a company which provides the insurance. We maymonitor our loans for the purpose of determining whether you andother borrowers have complied with the insurance requirements ofour loan agreements or may engage others to do so. The insurancecharge added to the Loan may include (1) the insurance company'sNXX042-eClosed-End Consumer Lending User Guide 46

Page 3 instructions (continued)57. What Happens if you are in Default – This paragraph describes your credit union’s rights if theproperty is in default. It gives your credit union the right to accelerate the debt and repossess thecollateral upon default. It establishes the right to sell the repossessed property and to pass anycosts involved onto your borrowers. Lastly, it requires your borrower to pay any remaining loanbalance after the sale money has been applied. If you are required to give the borrower a right tocure the default, be sure to follow state law requirements on the timing and content of the notice.58. Delay in Enforcing Rights and Changes in the Loan – This statement provides that yourcredit union can delay enforcing any rights under this Agreement without losing the ability toexercise those rights later.59. Continued Effectiveness – This statement deems that if a court finds any part of the Agreementunenforceable, the remainder of the Agreement is still in effect.60. Notice to North Dakota Borrowers Purchasing a Motor Vehicle – This paragraph states thata motor vehicle may be subject to repossession for North Dakota borrowers. This notice will onlyappear on the document used for North Dakota borrowers.61. Notice for Arizona Owners of Property – This paragraph describes responsibilities for Arizonaowners of property when in default on a motor vehicle. This notice will only appear on thedocument used for Arizona borrowers.62. Consumers’ Claims and Defenses Notice – Whenever your credit union is selling arepossessed vehicle and financing it, the checkbox for the “Consumers’ Claims and DefensesNotice” should be checked. The Consumers’ Claims and Defenses Notice may also be requiredin other situation where the credit union has a business relationship with the seller of goods.63. Other Provisions – This section allows your credit union some flexibility by adding specialprovisions such as governing law, demand feature language, lease-like language, or optionagreements.Closed-End Consumer Lending User Guide 48

Chapter 5:Dwelling Variable Loan and Security Agreements andDisclosure StatementDocument Description – Electronic formatWhen Used:Purpose:DocumentNumber:How distributed:State-specificversions:This document is used when a borrower has been approved for avariable rate closed-end loan secured by a dwelling that is personalproperty (such as a mobile home in a park).The Loan and Security Agreements and Disclosure Statement provide:1. disclosures required by Regulation Z.2. contract terms between the credit union and the borrower(s)All Truth in Lending disclosures are given in the “Fed Box” area. TheLoan Agreement and Security Agreement are separate agreements.NXX06*A copy of this document must be given to a borrower (if joint borrowers,only one needs to receive a copy).Florida, Iowa, Louisiana, New Hampshire, Right to Cure, Virginia andWisconsin.*Indicates spaceholder for version numberClosed-End Consumer Lending User Guide 49

Page 1 sample1LOAN DATE2NAME AND ADDRESSLOAN NUMBER3BORROWER 1ACCOUNT NUMBER4Loan and Security Agreementsand Disclosure StatementGROUP POLICY NUMBERBORROWER 2NAME (AND ADDRESS IF DIFFERENT FROM BORROWER 1)5MATURITY DATE67TRUTH IN LENDING DISCLOSURE 'e' means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGE Amount Financed Total of Payments Total Sale PriceThe cost of your credit as a yearly rate. The dollar amount the credit The amount of credit provided The amount you will have The total cost of your purchase onwill cost you.to you or on your behalf. paid after you have made credit is $all payments as scheduled. which includes your8 %$ 9$ 10$ 11downpayment of $ 12 .Prepayment: If you pay off early you will not have to pay a penalty. 13Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any. 14Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union.If you get the insurance from the Credit Union you will pay $ 15Assumption: Someone buying your dwelling cannot assume the remainder of the loan on the original terms. 16Your loan contains a variable rate feature. Disclosures about the variable rate feature have been provided to you earlier.INTEREST RATEINTRODUCTORY MAXIMUM during MAXIMUM EVERAND PAYMENT SUMMARYRate & Monthly Payment FIRST FIVE YEARS (as early as(for first ))Interest Rate17 % 18 %19 %20 %Principal + Interest Payment$ 21$ 22$ 23Est. Taxes + Insurance (Escrow)(Includes Private Mortgage Insurance)$ 24$ 24$ 24Total Est. Monthly Payment$ 25$ 26$ 27There is no guarantee that you will be able to refinance to lower your rate and payments.Introductory Rate (Check only if Introductory rate is not based on Index plus margin.)Filing FeesYou have a discounted introductory rate of % that ends after .$ 30In the , even if market rates do not change, this rate will increase to 28 %. Non-FilingInsuranceBalloon Payment (Check if applicable) Final Balloon Payment due 29$$ 31Late Charge:32Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in yourshares and dividends and, if any, your deposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/Make Year I.D. Number Type Value$$Key Number33$Other (Describe)Pledge of Shares $in Account No.$ in Account No.See your contract documents for any additional information about nonpayment, default, and any required repayment in full before thescheduled date.34CUNA Mutual Group 2011 All Rights ReservedNXX061-eClosed-End Consumer Lending User Guide 50

Page 1 instructionsPlease refer to the document on the preceding pages for the corresponding numbers.1. Credit Union Information – This space is used to identify the credit union as required byRegulation Z, Section 1026.18(a). Have your data processor set up your credit union’s name,address, telephone number and logo to print.2. Loan Date – Date of current loan.3. Loan Number – Loan identification number as defined by the credit union.4. Account Number – Member account number.5. Group Policy Number – Enter the credit union’s contract number as defined by CUNA MutualGroup.6. Maturity Date – Enter maturity date of loan.7. Borrower 1 Name and Address/Borrower 2 Name and Address – Name and address of eachborrower.Truth in Lending Disclosure SectionThe Truth in Lending Act requires certain disclosures be segregated from other information on aclosed-end lending document per Regulation Z, Section 1026.17(a). The area labeled “Truth inLending Disclosure” is referred to as the “Fed Box.” The Truth in Lending Disclosure contains thefollowing items:8. Annual Percentage Rate – Your credit union completes the APR for the loan requested,Regulation Z, Sections 1026.18(e) and 1026.22.Note: The APR will be the simple interest rate when the only finance charge is interest. If financecharges other than interest are to be included, the APR will be different than the simple interestrate and must be calculated using a calculation device sufficiently sophisticated to correctlycompute the correct APR. Examples of finance charges on consumer loans include:a) credit report feesb) loan processing feesc) mandatory residual value insurance (RVI)d) mandatory GAP coverage9. Finance Charge – Your credit union completes the total finance charge for the loan as requiredby Regulation Z, Section 1026.18(d).Note: Any prepaid finance charge should be included in this amount. Do not put an ‘e’ forestimate in this box. The Disclosure should be completed with the total finance charge known atthe time of disclosure.Closed-End Consumer Lending User Guide 51

Page 1 instructions (continued)10. Amount Financed – Regulation Z, Section 1026.18(b) requires that the amount financed becalculated in the following way:a) Start with the principal loan amount.b) Add other amounts that are financed by the lender and are not part of the finance charge.Level rate and monthly renewable credit insurance is not financed; therefore, the cost forthis insurance should not be included in the “Amount Financed” section. Single premiuminsurance is financed and will be included in this amount.c) Subtract any prepaid finance charge.11. Total of Payments – The sum of the payments for the loan, Regulation Z, Section 1026.18(h).The total payments will be based on the contractual payment shown in paragraph one of theNote.12. Total Sales Price – Regulation Z, Section 1026.18(j) requires this disclosure be used wheneveryour credit union is both the seller and the creditor. This is most likely to happen when you areselling a repossessed vehicle. In this section you must disclose both the total sale price and thedownpayment amount, if any.The total sale price is the sum of the:a) cash priceb) amounts that are financed but not finance chargesc) finance charge13. Prepayment – Regulation Z, Section 1026.18(k) requires disclosure of any prepayment penalty.The language in the LOANLINER documents prohibits a prepayment penalty.14. Required Deposit – Per Regulation Z, Section 1026.18(r) and footnote 45, this language isrequired when the borrower must maintain a deposit as a condition of the loan.15. Property Insurance – If your credit union sells property insurance, enter the amount of theinsurance premium. The term of the insurance must also be disclosed if it is less than the term ofthe loan, Regulation Z, Section 1026.18(n).16. Assumption – Since most credit unions do not allow loans to be assumed, this statementinforms the borrowers that the loan cannot be assumed. Regulation Z, Section 1026.18(q).17. Interest Rate – Regulation Z, Section 1026.18(s)(2)(i) requires the disclosure of the interest rateat consummation and the period of time until the first interest rate adjustment may occur. Thischeckbox and interest rate is filled in if the interest rate is not based on an index plus margin.18. Interest Rate – Regulation Z, Section 1026.18(s)(2)(i) requires the disclosure of the interest rateat consummation and the period of time until the first interest rate adjustment may occur. Thischeckbox and interest rate is filled in if the interest rate is based on an index plus margin.19. Interest Rate – Regulation Z, Section 1026.18(s)(2)(i) requires the disclosure of the maximuminterest rate that may apply during the first five years after consummation and the earliest date onwhich the rate may apply.Closed-End Consumer Lending User Guide 52

Page 1 instructions (continued)20. Interest Rate – Regulation Z, Section 1026.18(s)(2)(i) states that the credit union must providethe maximum interest rate that may apply during the life of the loan and indicate the earliest datethe rate applies.21, 22 & 23. Principal + Interest Payment – Section 1026.18(s)(3)(i) states that if all periodicpayments are applied to accrued interest and principal, then the corresponding periodic principaland interest payment is to be disclosed.24. Estimated Taxes + Insurance (Escrow) (Includes Private Mortgage Insurance) – RegulationZ, Section 1026.18(s)(3)(i) states that if an escrow account is required, an estimate of theamount of taxes and insurance, including any mortgage insurance, is to be provided.25, 26 & 27. Total Estimate Monthly Payment – Regulation Z, Section 1026.18(s)(3)(i) comesfrom the sum of the amounts disclosed in each column. This figure cannot include any creditinsurance or debt protection amounts.28. Introductory Rate – Regulation Z, Section 1026.18(s)(2)(iii) states that if the interest rate atconsummation is less than the fully indexed rate, the discounted rate and time period alongwith the increased rate and when the rate will increase needs to be provided below the interestrate and payment summary table. Only enter information in this section if the interest rate is notbased on an index plus margin.29. Balloon Payment – Regulation Z, Section 1026.18(s)(5)(i) states that if the transaction requiresa balloon payment, the due date and balloon payment amount need to be disclosed below theinterest rate and payment summary table.30. Filing Fees – If you pass on the cost of filing fees (for example, a lien filing fee) to borrowers,whether directly or indirectly, you must disclose the cost — even if the borrower pays the fee incash to the credit union or a third party. This fee is not a finance charge if you only pass on theactual cost charged by government officials, Regulation Z, Section 1026.18(o).31. Non-Filing Insurance – Enter the dollar amount of the non-filing insurance. This insurancepremium is used to perfect the lien in lieu of actually filing the security interest, Regulation Z,Section 1026.18(o).32. Late Charge – The late charge is any dollar or percentage charge that may be imposed beforematurity due to a late payment. This language is provided by the credit union and may be printedon the documents, Regulation Z, Section 1026.18(l).33. Security – The statement “Collateral securing other loans with the credit union may alsosecure this loan” is printed to disclose the existence of a cross-collateral clause in the SecurityAgreement. The statement “You are giving a security interest in your shares and dividends and,if any, your deposits and interest in the credit union; and the property described below:” disclosesthat shares/deposits are also offered to secure the loan. The description of the collateral mustbe included here since this portion of the Truth in Lending Disclosure also is part of the SecurityAgreement. A complete description of collateral should be shown. Also, additional securityoffered should be disclosed in the “other” field. For the “Pledge of Shares” box, enter the amountand account number for share secured loans.34. Contract Reference – This is a statement per Regulation Z, Section 1026.18(p) that theconsumer should refer to the appropriate contract documents for information about nonpayment,default and prepayment penalties, and rebates.Closed-End Consumer Lending User Guide 53

Page 2 sampleCredit Union Loan No. Acct. No.Borrower(s)ITEMIZATION OF THE AMOUNT FINANCEDItemization of Amount Financed of Amount Given to You Directly Amount Paid on Your Account Prepaid Finance Charge$ 35$ 36$ 37$ 38Amounts Paid to Others on Your Behalf: (If an amount is marked with an asterisk (*) we will be retaining a portion of the amount.)$ To $To$To$To$ To39$To$To$To$ To$To$To$To$ To$ToLOAN AGREEMENTIn this Loan Agreement ("Agreement") all references to "Credit Union," "we," "our," or "us," mean the Credit Union whose nameappears above and anyone to whom the Credit Union assigns or transfers this Agreement. All references to "you" or "your" mean eachperson who signs, or otherwise authenticates, this Agreement as a borrower.40 1. PROMISE TO PAY - You promise to pay $ to the Credit Union plus interest on the unpaid balance until what you owehas been paid. You will pay principal and interest by making payments each month. Your initial monthly payment will be in the amountof U.S. $. This amount may change if the interest rate changes. You will receive notice of interest rate and paymentchanges as required by law. You will make payments on the day of each month beginning on . You will make thesepayments every month until you have paid all of the principal and interest and any other charges, described below, that you may oweunder this Note. If, on, you still owe amounts under this Note you will pay all amounts in full on that date.The initial interest rate is % per year and will vary as follows:41 Collection Costs:42 2. PAYMENTS - The Promise to Pay section tells you howan interest rate change will affect your payment. If youelect voluntary payment protection, we will include thepremium or program fee in your payments. If yousubsequently elect voluntary payment protection, we willeither include the premium or program fee in your payments4344or extend the term of your loan. If the term is extended,you will be required to make additional payments of thescheduled amount, until what you owe has been paid. Youmay prepay any amount without penalty. If you prepay anypart of what you owe, you are still required to make theregularly schedule payments, unless we have agreed to achange in the payment due date. Because this is a simpleinterest loan, if you do not make payments exactly on thedue date, your final payment may be more or less than theamount of the final payment that is disclosed. You promiseto make all payments to the place we choose. If this loanrefinances another loan we have with you, the other loanwill be canceled and refinanced as of the date of this loan.Unless otherwise required by law, payments will be appliedto amounts owed in the manner we choose.3. LOAN PROCEEDS BY MAIL - If the proceeds of this loanare mailed to you, interest on this loan begins on the datethe loan proceeds are mailed to you.4. SECURITY FOR LOAN - This Agreement is secured by allproperty described in the "Security" section of the Truth inLending Disclosure. Property securing other loans you havewith us also secures this loan, unless the property is adwelling. In addition to your pledge of shares, we may alsohave what is known as a statutory lien on all individual andjoint accounts you have with us. A statutory lien means wehave the right under federal law and many state laws toclaim an interest in your accounts. We can enforce astatutory lien against your shares and dividends, and if any,interest and deposits, in all individual and joint accounts youhave with us to satisfy any outstanding financial obligationthat is due and payable to us. We may exercise our rightto enforce this lien without further notice to you, to theextent permitted by law. For all borrowers: You pledge assecurity for this loan all shares and dividends and, if any, alldeposits and interest in all joint and individual accounts youhave with the Credit Union now and in the future. Thestatutory lien and/or your pledge will allow us to apply thefunds in your account(s) to what you owe when you are indefault. The statutory lien and your pledge do not apply toany Individual Retirement Account or any other account thatwould lose special tax treatment under state or federal lawif given as security.5. DEFAULT - You will be in default under this Agreement ifyou do not make a payment of the amount required on orbefore the date it is due. You will be in default if you breakany promise you made in connection with this loan or ifanyone is in default under any security agreement made inconnection with this Agreement. You will be in default ifyou die, file for bankruptcy, become insolvent (that is,unable to pay your bills and loans as they become due), orif you made any false or misleading statements in your loanapplication. You will also be in default if something happensthat we believe may seriously affect your ability to repaywhat you owe under this Agreement or if you are in defaultunder any other loan agreement you have with us.6. ACTIONS AFTER DEFAULT - When you are in default,we may demand immediate payment of the entire unpaidbalance under this Agreement. You waive any right youhave to receive demand for payment, notice of intent todemand immediate payment and notice of demand forimmediate payment. If we demand immediate payment, youwill continue to pay interest at the rate provided for in thisAgreement, until what you owe has been repaid. We willalso apply against what you owe any shares and/or depositsgiven as security under this Agreement. We may alsoexercise any other rights given by law when you are indefault.4546NXX061-eClosed-End Consumer Lending User Guide 54

Page 2 instructionsItemization of Amount Financed Section35. Itemization of Amount Financed – Enter amount the borrower financed per Regulation Z,Section 1026.18(c). This is the amount shown in the “Amount Financed” box.36. Amount Given to You Directly – Enter the amount of money given to the borrower in the formof cash or a check, as well as funds placed in an asset account. (Asset accounts include, but arenot limited to, share accounts, share draft accounts, etc.)Note: If a check is made out to the borrower and another party, this amount is to be included inthis box. You don’t have to show the other party in the section “Amounts Paid to Others on yourBehalf,” Regulation Z, Official Staff Interpretation, paragraph 18(c)(1)(i) - 1. Amounts paid toConsumer.37. Amount Paid on Your Account – This is the amount your credit union will use to pay offan existing loan balance. This section would include a payment of an existing loan balance(principal and accrued interest) on a prior loan. Only amounts paid to loan accounts should beshown here, Regulation Z, Section 1026.18(c)(1)(ii).38. Prepaid Finance Charge – Prepaid finance charges include any portion of the finance chargepaid prior to or at closing or settlement. They may be paid in cash or financed and withheldfrom the proceeds. Some common examples include: service fees, loan fees, loan guaranteeinsurance, credit report fees, residual value insurance and mandatory GAP coverage. Prepaidfinance charges are subtracted from the amount financed and added to the finance charge fordisclosure purposes. This will result in an APR that is different than the contractual interest rate.39. Amount Paid to Others on Your Behalf – These boxes are provided to disclose amountspaid to other persons by the credit union on the borrower’s behalf. These persons must beidentified by name except that payments to government agencies, public officials, credit reportagencies, appraisers and insurance companies may be generically identified with phrases like“credit bureau” or “state agency.” If loan checks are made payable to a third party only, and notthe borrower, the amount of the payment and the name of the third party must be disclosed,Regulation Z, Section 1026.18(c)(1)(iii).Note: The level rate or monthly renewable credit disability/credit life costs and amounts need notbe disclosed in this section.This section includes a sentence which reads as follows: If an amount is marked with anasterisk(*), we will be retaining a portion of the amount. An asterisk should be used wheneverthe borrower is financing a product for which the credit union imposes an “upcharge.” Typically,if the credit union sells mechanical repair coverage (MRC) or extended warranties and retainsa portion of the amount, then an asterisk will be needed. An example would be if the borrowerpurchased an extended warranty from the credit union. The warranty may cost the credit union$300.00, but the credit union charges the borrower $400.00. The $100.00 difference is an“upcharge” on this product. The credit union needs to disclose that it is retaining a portion of the$400.00 that is being charged to the borrower.Closed-End Consumer Lending User Guide 55

Page 2 instructions (continued)Loan Agreement Section40. Promise to Pay – This is the contractual promise to repay the principal loan amount plusinterest. Your credit union should put the initial interest rate as well as the principal amountborrowed. Also include the variable rate contract language.Variable Rate – The definition of a variable rate loan for closed-end credit is any loan thatcan increase after consummation in a transaction not secured by the consumer’s principaldwelling. The Loan and Security Agreement was designed to handle all types of credit securedby personal property. There are many types of variable rate closed-end transactions and theygenerally fall into one of the following categories:a) Changes that follow an external index such as the Prime Rate, Treasury Bill Rates, EleventhDistrict Cost of Funds, Treasury Securities, etc. These are indexes that are set up by someagency or group other than the credit union and are generally published in The Wall StreetJournal, the financial pages of many local newspapers and the Federal Reserve StatisticalRelease and Federal Reserve Board Bulletin.b) Changes that follow an external index that are beyond the control of the credit union suchas the rate charged by another local financial institution; e.g., the fixed rate charged by XYZFinancial for 30-year fixed rate mortgages. These rates generally are not officially publishedlike the indices described in (a.) above, but they are beyond the control of the credit union.c) Changes that follow an internal index of the credit union. An example would be the creditunion’s rate on 6-month certificates or the dividend rate paid on share accounts.d) Changes in the rate that are based entirely on the discretion of the credit union’s board ofdirectors. At any particular time the board of directors can decide that the interest rate willchange on existing loans.e) Changes that are tied to some event or occurrence. Common occurrences in credit unionloans which trigger an interest rate increase include: (a) when an employee leaves theemployment of the credit union, (b) discontinuing payroll deduction or automatic payment,(c) failure to maintain minimum account balances or (d) failure to maintain certain services.f) A renewable balloon payment when (1) the credit union is unconditionally obligated torenew the balloon payment loan at the consumer’s option or subject to conditions within theconsumer’s control and (2) the credit union has the option of increasing the interest rate atthe time of renewal of the balloon.Closed-End Consumer Lending User Guide 56

Page 2 instructions (continued)REQUIRED DISCLOSURES FOR VARIABLE RATE LOANSThe following disclosures must appear in this section of the document:• The Circumstances Under Which the Rate May IncreaseSAMPLE LANGUAGE:The APR may increase during the term of this transaction if:[the prime interest rate of (creditor) increases.][the balance in your deposit account falls below $__________.][you terminate your employment with (employer).]• Any Limitation on the IncreaseSAMPLE LANGUAGE:[The interest rate will not increase above ______%.][The maximum interest rate increase at one time will be _____%.][The rate will not increase more than once every (time period).]• The Effect of an IncreaseSAMPLE LANGUAGE:Any increase will take the form of:[higher payment amounts.][more payments of the same amount.][a larger amount due at maturity.]• An Example of the Payment Terms that would Result from an IncreaseThe example must be either a standard example that illustrates the terms and conditions ofthe type of credit offered by the credit union or it may directly reflect the terms and conditionsof the particular transaction.In addition to the Truth in Lending Disclosures, you must also explain any other terms ofthe variable rate which are directly related. These include: the margin, interest rate floors,rounding of index values or payments.41. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are to be disclosed. This language may be imprinted.42. Payments – This is the borrower’s promise to make payments as specified in the Truth inLending Disclosure. This paragraph also discloses to the borrower that there is no prepaymentpenalty and if payments are not made as scheduled, the final payment may be more or lessthan the final payment that was disclosed. Also, if voluntary payment protection is elected, thepremium or program fees may be included in the payment or the loan term will be extended. Ifyou are using a fixed/variable note, this section would also contain information on the variablerate.Closed-End Consumer Lending User Guide 57

Page 2 instructions (continued)43. Loan Proceeds By Mail – This is an explanation that interest begins on the date the loanproceeds are mailed, if this loan is transacted through the mail.44. Security For Loan – Regulation Z, Section 1026.18(m) requires that the creditor disclose thefact that it will acquire a security interest in the property purchased or in other property identifiedby item or type. The LOANLINER Loan Agreement discloses that the loan is secured by all itemsdescribed in the “Security” section of the Truth in Lending Disclosure.The loan also is secured by property securing other loans with the credit union.Much of this section deals with a statutory lien. A statutory lien is applicable to federal andmany state-chartered credit unions. In 1999, NCUA issued regulations that required federalcredit unions to disclose statutory liens in a certain manner. If a borrower’s loan is in default,the statutory lien allows your credit union to apply the balance of shares and dividends in allindividual and joint accounts with your credit union to satisfy the obligation.There is also a general pledge of shares in this section, which allows your credit union to applythe funds in your borrower’s account(s) to what they owe when they are in default. This pledgeis considered additional security for all loans. The pledge does not apply to IRAs or any otheraccount that would lose special tax treatment under state or federal law if given as security. Aslong as your borrower is making payments and the loan is not share secured, your borrower hasaccess to his/her shares and/or deposits.Note: For state-chartered credit unions located in states where statutory liens are not allowed,the general pledge of shares would apply.45. Default – This paragraph describes the elements of default and allows your credit union toaccelerate the unpaid balance in the event of default. The default language will vary by versiondue to state law requirements. Be sure to read this paragraph before deciding whether you cancall a loan in default. If you have questions, consult your legal counsel.46. Actions After Default – This section includes a statement allowing the credit union to acceleratethe unpaid balance in the event of default. If this paragraph gives the borrower a right to curethe default, be sure you comply with the applicable state law on timing and content of the Rightto Cure Notice. When a debt is accelerated, interest will continue on the unpaid balance atthe same rate. Lastly, your credit union may exercise any other rights given by law when yourborrower is in default.Closed-End Consumer Lending User Guide 58

To create these samples, pull the pdf into an InDesign file and add the circles to a seperate layer. Now make a high res pdf ofthe form with circle numbers to use as a graphic for the manual. (maz)Page 3 sample47484950Credit Union Loan No. Acct. No.Borrower(s)7. EACH PERSON RESPONSIBLE - Each person who signs,or otherwise authenticates, this Agreement will beindividually and jointly responsible for paying the entireamount owed under this Agreement. This means we canenforce our rights against any one of you individually oragainst all of you together.8. LATE CHARGE - If you are late in making a payment,you promise to pay the late charge shown in the Truth inLending Disclosure. If no late charge is shown, you will notbe charged one.9. DELAY IN ENFORCING RIGHTS - We can delay enforcingany of our rights under this Agreement any number of timeswithout losing the ability to exercise our rights later. Wecan enforce this Agreement against your heirs or legalrepresentatives.10. CONTINUED EFFECTIVENESS - If any part of thisAgreement is determined by a court to be unenforceable,the rest will remain in effect.LOAN AGREEMENT (continued)11. NOTICES - Notices will be sent to you at the most recentaddress you have given us in writing. Notice to any one ofyou will be notice to all.12. USE OF ACCOUNT - You promise to use your accountfor consumer (personal, family or household) purposes,unless the Credit Union gives you written permission to usethe account also for agricultural or commercial purposes, orto purchase real estate.13. NO ORAL AGREEMENTS -- THIS NOTE CONSTITUTESA "WRITTEN LOAN AGREEMENT" PURSUANT TOSECTION 26.02 OF THE TEXAS BUSINESS ANDCOMMERCE CODE, IF SUCH SECTION APPLIES. THISWRITTEN LOAN AGREEMENT REPRESENTS THE FINALAGREEMENT BETWEEN THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMP-ORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OFTHE PARTIES. THERE ARE NO UNWRITTEN ORALAGREEMENTS BETWEEN THE PARTIES.14. OTHER PROVISIONS -5152535455 SIGNATURESBy signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property isdescribed in the "Security" section of the Truth in Lending Disclosure, you also agree to the terms of the SecurityAgreement. If you sign, or otherwise authenticate, as "Owner of Property" you agree only to the terms of the SecurityAgreement.CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.Borrower 1 SignatureX(Seal)DateBorrower 2 SignatureX(Seal)Date56SignatureX(Seal)DateSignatureX(Seal)DateOther Borrower Owner of Property WitnessOther Borrower Owner of Property WitnessNXX061-eClosed-End Consumer Lending User Guide 59

Page 3 instructions47. Each Person Responsible – This paragraph explains that each person who signs, or otherwiseauthenticates the Loan Agreement will be held individually and jointly responsible for paying theentire amount owed under the Agreement.48. Late Charge – This paragraph explains that if your borrower is late in making a payment, theypromise to pay the late charge shown in the Truth in Lending Disclosure, if one is disclosed.49. Delay in Enforcing Rights – This statement provides that your credit union can delay enforcingany rights under this Agreement without losing the ability to exercise those rights later.50. Continued Effectiveness – This statement deems that if a court finds any part of the Agreementunenforceable, that the remainder of the Agreement remains in effect.51. Notices – This paragraph states that your credit union will send notices to the most recentaddress your borrower gave your credit union in writing and that notice to one is notice to all.52. Use of Account – This paragraph was added to the Loan Agreement due to the BankruptcyAbuse Prevention and Consumer Protection Act of 2005 (BAPCPA) which gave the credit unionprotection against court-ordered reduction (cramdown) of a secured balance due on purchasemoneysecured debt acquired for personal, family or household purposes. This provision willprove a vehicle was purchased for personal use.53. No Oral Agreements – This paragraph applies to Texas transactions and confirms that the rightsand obligations of the borrower and lender shall be determined solely from the written LoanAgreements and any prior oral agreements between the lender and borrower are superseded bythe Loan Agreement.54. Other Provisions – This section allows your credit union some flexibility by adding specialprovisions such as governing law, demand feature language, lease-like language, or optionagreements.Signatures Section55. Signature Section – This area contains signature language that will vary on some documentsdue to state law variations.56. Borrower’s Signature – The borrower signs, or otherwise authenticates the Loan and SecurityAgreements and Disclosure Statement in this area. Additional signatures may be obtained usingthese areas. By signing, or otherwise authenticating as a borrower, a person is agreeing to theLoan and Security Agreements. If the owner of the property is not a borrower, the box “Owner ofProperty” should be checked. (This is the ONLY situation when this box should be checked.) Theowner of property is agreeing only to the terms of the Security Agreement. A witness may alsosign here. A witness signature is not required under the Truth in Lending Act.Closed-End Consumer Lending User Guide 60

To create these samples, pull the pdf into an InDesign file and add the circles to a seperate layer. Now make a high res pdf ofthe form with circle numbers to use as a graphic for the manual. (maz)Page 4 sample575859606162Credit Union Loan No. Acct. No.Borrower(s)SECURITY AGREEMENTIn this Agreement all references to "Credit Union," "we," "our" or"us" mean the Credit Union whose name appears on this documentand anyone to whom the Credit Union assigns or transfers thisAgreement. All references to the "Loan" mean the loan described inthe Loan Agreement that is part of this document. All references to"you" or "your" mean any person who signs, or otherwiseauthenticates, this Agreement.1. THE SECURITY FOR THE LOAN - You give us what is known as asecurity interest in the property described in the "Security" sectionof the Truth in Lending Disclosure that is part of this document ("theProperty"). The security interest you give includes all accessions.Accessions are things which are attached to or installed in theProperty now or in the future. The security interest also includes anyreplacements for the Property which you buy within 10 days of theLoan and any extensions, renewals or refinancings of the Loan. Italso includes any money you receive from selling the Property orfrom insurance you have on the Property. If the value of theProperty declines, you promise to give us more property as securityif asked to do so.2. WHAT THE SECURITY INTEREST COVERS/CROSS COLLATERALPROVISIONS - The security interest secures the Loan and anyextensions, renewals or refinancings of the Loan. If the Property isnot a dwelling, the security interest also secures any other loans,including any credit card loan, you have now or receive in the futurefrom us and any other amounts you owe us for any reason now or inthe future, except any loan secured by your principal residence. Ifthe Property is household goods as defined by the Federal TradeCommission Credit Practices Rule or your principal residence, theProperty will secure only this Loan and not other loans or amountsyou owe us.3. OWNERSHIP OF THE PROPERTY - You promise that you own theProperty or, if this Loan is to buy the Property, you promise you willuse the Loan proceeds for that purpose. You promise that no oneelse has any interest in or claim against the Property that you havenot already told us about. You promise not to sell or lease theProperty or to use it as security for a loan with another creditor untilthe Loan is repaid. You promise you will allow no other securityinterest or lien to attach to the Property either by your actions or byoperation of law.4. PROTECTING THE SECURITY INTEREST - If your state issues atitle for the Property, you promise to have our security interestshown on the title. We may have to file what is called a financingstatement to protect our security interest from the claims of others.You irrevocably authorize us to execute (on your behalf), ifapplicable, and file one or more financing, continuation oramendment statements pursuant to the Uniform Commercial Code(UCC) in a form satisfactory to us. You promise to do whateverelse we think is necessary to protect our security interest in theProperty. You also promise to pay all costs, including but not limitedto any attorney fees, we incur in protecting our security interest andrights in the Property, to the extent permitted by applicable law.5. USE OF PROPERTY - Until the Loan has been paid off, youpromise you will: (1) Use the Property carefully and keep it in goodrepair. (2) Obtain our written permission before making majorchanges to the Property or changing the address where the Propertyis kept. (3) Inform us in writing before changing your address. (4)Allow us to inspect the Property. (5) Promptly notify us if theProperty is damaged, stolen or abused. (6) Not use the Property forany unlawful purpose. (7) Not retitle Property in another statewithout telling us.6. PROPERTY INSURANCE, TAXES AND FEES - You promise to payall taxes and fees (like registration fees) due on the Property and tokeep the Property insured against loss and damage. The amount andcoverage of the property insurance must be acceptable to us. Youmay provide the property insurance through a policy you alreadyhave, or through a policy you get and pay for. You promise to makethe insurance policy payable to us and to deliver the policy or proofof coverage to us if asked to do so.If you cancel your insurance and get a refund, we have a right to therefund. If the Property is lost or damaged, we can use the insurancesettlement to repair the Property or apply it towards what you owe.You authorize us to endorse any draft or check which may bepayable to you in order for us to collect any refund or benefits dueunder your insurance policy.If you do not pay the taxes or fees on the Property when due orkeep it insured, we may pay these obligations, but we are notrequired to do so. Any money we spend for taxes, fees or insurancewill be added to the unpaid balance of the Loan and you will payinterest on those amounts at the same rate you agreed to pay onthe Loan. We may receive payments in connection with theinsurance from a company which provides the insurance. We maymonitor our loans for the purpose of determining whether you andother borrowers have complied with the insurance requirements ofour loan agreements or may engage others to do so. The insurancecharge added to the Loan may include (1) the insurance company'spayments to us and (2) the cost of determining compliance with theinsurance requirements. If we add amounts for taxes, fees orinsurance to the unpaid balance of the Loan, we may increase yourpayments to pay the amount added within the term of theinsurance or term of the Loan.7. INSURANCE NOTICE - If you do not purchase the requiredproperty insurance, the insurance we may purchase and charge youfor will cover only our interest in the Property. The premium forthis insurance may be higher because the insurance company mayhave given us the right to purchase insurance after uninsuredcollateral is lost or damaged. The insurance will not be liabilityinsurance and will not satisfy any state financial responsibility or nofault laws.8. DEFAULT - You will be in default if you break any promise youmake or fail to perform any obligation you have under thisAgreement. You will also be in default under this Agreement if theLoan is in default. You will be in default if any property you havegiven us as security is repossessed by someone else, seized undera forfeiture or similar law, or if anything else happens thatsignificantly affects the value of the property or our securityinterest in it.9. WHAT HAPPENS IF YOU ARE IN DEFAULT - When you are indefault, we may demand immediate payment of the outstandingbalance of the Loan without giving you advance notice and takepossession of the Property. You agree the Credit Union has theright to take possession of the Property without judicial process ifthis can be done without breach of the peace. If we ask, youpromise to deliver the Property at a time and place we choose. Ifthe property is a motor vehicle or boat, you agree that we mayobtain a key or other device necessary to unlock and operate it,when you are in default. We will not be responsible for any otherproperty not covered by this Agreement that you leave inside theProperty or that is attached to the Property. We will try to returnthat property to you or make it available for you to claim.After we have possession of the Property, we can sell it and applythe money to any amounts you owe us. We will give you notice ofany public disposition or the date after which a private dispositionwill be held. Our expenses for taking possession of and selling theProperty will be deducted from the money received from the sale.Those costs may include the cost of storing the Property, preparingit for sale and attorney's fees to the extent permitted under statelaw or awarded under the Bankruptcy Code.If you have agreed to pay the Loan, you must pay any amount thatremains unpaid after the sale money has been applied to the unpaidbalance of the Loan and to what you owe under this Agreement.You agree to pay interest on that amount at the same rate as theLoan until that amount has been paid.10. DELAY IN ENFORCING RIGHTS AND CHANGES IN THE LOAN -We can delay enforcing any of our rights under this Agreement anynumber of times without losing the ability to exercise our rightslater. We can enforce this Agreement against your heirs or legalrepresentatives. If we change the terms of the Loan, you agree thatthis Agreement will remain in effect.11. CONTINUED EFFECTIVENESS - If any part of this Agreement isdetermined by a court to be unenforceable, the rest will remain ineffect.12. NOTICE TO NORTH DAKOTA BORROWERS PURCHASING AMOTOR VEHICLE - THE MOTOR VEHICLE IN THIS TRANSACTIONMAY BE SUBJECT TO REPOSSESSION. IF IT IS REPOSSESSEDAND SOLD TO SOMEONE ELSE, AND ALL AMOUNTS DUE TO THESECURED PARTY ARE NOT RECEIVED IN THAT SALE, YOU MAYHAVE TO PAY THE DIFFERENCE.13. NOTICE FOR ARIZONA OWNERS OF PROPERTY - It is unlawfulfor you to fail to return a motor vehicle that is subject to a securityinterest, within thirty days after you have received notice ofdefault. The notice will be mailed to the address you gave us. It isyour responsibility to notify us if your address changes. Themaximum penalty for unlawful failure to return a motor vehicle isone year in prison and/or a fine of $150,000.00.The following notice applies ONLY when the box at left is marked.14. NOTICE: ANY HOLDER OF THIS CONSUMER CREDITCONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSESWHICH THE DEBTOR COULD ASSERT AGAINST THESELLER OF GOODS OR SERVICES OBTAINED PURSUANTHERETO OR WITH THE PROCEEDS HEREOF. RECOVERYHEREUNDER BY THE DEBTOR SHALL NOT EXCEEDAMOUNTS PAID BY THE DEBTOR HEREUNDER.15. OTHER PROVISIONS -636465666768697071NXX061-eClosed-End Consumer Lending User Guide 61

Page 4 instructionsSecurity Agreement Section57. The Security For the Loan – This paragraph grants your credit union a security interest inthe property described in the “Security” section of the Truth in Lending Disclosure. It is veryimportant that you thoroughly describe the collateral in the Truth in Lending Disclosure. It alsopermits your credit union a security interest in accessions, proceeds of the collateral and allowsyou to obtain additional collateral if the market value of the collateral declines.58. What the Security Interest Covers – This paragraph states that the property described in theTruth in Lending Disclosure secures this loan. If the property is not a dwelling, then the securityfor the loan will also be security for other debts with the credit union, now and in the future. Thisis known as a “cross-collateral” clause. However, if the property is household goods as definedby Federal Trade Commission Credit Practices Rule, the property can only secure this loan andnot other loans or amounts owed to the credit union.59. Ownership of the Property – This paragraph describes the borrower’s ownership rights. Thisclause explains that a borrower can be considered in default if they sign the Security Agreementand they do not own the collateral shown in the “Security” section of the Truth in LendingDisclosure. It outlines that the borrower cannot sell the collateral or give anyone else a securityinterest in it until the debt has been paid, nor can they allow any other security interest or lien tobe attached to the property.60. Protecting the Security Interest – This paragraph requires the borrower to promise to assistthe credit union in any way to protect the security interest. It also requires the borrower toidentify your credit union as lien holder on the title and requires the borrower to sign a financingstatement, if necessary.61. Use of Property – This paragraph outlines the responsibilities of the borrower to maintain thecollateral.62. Property Insurance, Taxes and Fees – This paragraph contains information about taxes, feesand property insurance on the collateral. The borrower is required to pay all taxes and feesplus insure the property and name the credit union as loss payee on an insurance policy. Anyamounts spent by your credit union on taxes, fees or property insurance can be added to theloan balance and be subject to interest at the same rate as the original loan. Your credit unionhas the option of increasing the borrower’s payment to the extent necessary to repay the loan inthe original scheduled term or extend the term of the loan to repay these amounts.63. Insurance Notice – This paragraph states that if your borrower does not purchase propertyinsurance, your credit union can purchase and charge your borrower for insurance that coversonly your credit union’s interest in the property.64. Default – Article 9 of the Uniform Commercial Code (UCC) does not define default, so thecontract must define this term. Default is defined as breaking any promise or failing to performany obligation under this Security Agreement or the LOANLINER Loan and Security Agreementsand Disclosure Statement.Closed-End Consumer Lending User Guide 62

Page 4 instructions (continued)65. What Happens if you are in Default – This paragraph describes your credit union’s rights if theproperty is in default. It gives your credit union the right to accelerate the debt and repossess thecollateral upon default. It establishes the right to sell the repossessed property and to pass anycosts involved onto your borrowers. Lastly, it requires your borrower to pay any remaining loanbalance after the sale money has been applied. If you are required to give the borrower a right tocure the default, be sure to follow state law requirements on the timing and content of the notice.66. Delay in Enforcing Rights and Changes in the Loan – This statement provides that yourcredit union can delay enforcing any rights under this Agreement without losing the ability toexercise those rights later.67. Continued Effectiveness – This statement deems that if a court finds any part of the Agreementunenforceable, the remainder of the Agreement is still in effect.68. Notice to North Dakota Borrowers Purchasing a Motor Vehicle – This paragraph states thata motor vehicle may be subject to repossession for North Dakota borrowers. This notice will onlyappear on the document used for North Dakota borrowers.69. Notice for Arizona Owners of Property – This paragraph describes responsibilities for Arizonaowners of property when in default on a motor vehicle. This notice will only appear on thedocument used for Arizona borrowers.70. Consumers’ Claims and Defenses Notice – Whenever your credit union is selling arepossessed vehicle and financing it, the checkbox for the “Consumers’ Claims and DefensesNotice” should be checked. The Consumers’ Claims and Defenses Notice may also be requiredin other situation where the credit union has a business relationship with the seller of goods.71. Other Provisions – This section allows your credit union some flexibility by adding specialprovisions such as governing law, demand feature language, lease-like language, or optionagreements.Closed-End Consumer Lending User Guide 63

Variable Rate Sample 21. Index or Change Occurrence: 3 Month Treasury Bill2. Margin: 2.50%3. Rounding: Up to the next 0.50%4. Frequency of Rate Change: Annually on September 15. Interest Rate Ceiling / Maximum: 18.00%6. Interest Rate Floor / Minimum: 6.00% below the initial rate7. Periodic Cap: 2.00%8. Effect of Increase: Larger amount due at maturity“Fed Box” Disclosure: The APR may increase during the term of this transaction if the 3 MonthTreasury Bill (Index) changes. We will add a margin of 2.50% to the Index Value and then roundup to the next 0.50%. The rate will change annually on September 1 and will not change morethan 2.00% on each change date. The APR will never be higher than 18.00% or the maximumamount allowed by law, whichever is less. The rate will never be less than 6.00% below the initialrate. Any interest rate increase will result in a larger amount due at maturity. If your loan were for$__________ at __________% for (term), and the rate increased to __________% after (timeperiod), your final payment would be increased to $__________.Note Disclosure: The interest rate is subject to change as follows: the 3 Month Treasury Bill(Index) changes. We will add a margin of 2.50% to the Index value and then round up to the next0.50%. The rate will change annually on September 1 and will not change more than 2.00% oneach change date. The rate will never be higher than 18.00% or the maximum amount allowedby law, whichever is less. The rate will never be less than 6.00% below the initial rate. Anyinterest rate increase will result in a higher final payment due at maturity.9. Placement of variable rate contract language on documents:Paper Documents – You must include the variable rate “Fed Box” disclosure in the “VariableRate” section of the Truth in Lending Disclosure.Electronic Documents – You must include the variable rate “Fed Box” disclosure in the VariableRate section of the Truth in Lending Disclosure. Plus, in the “Promise to Pay” section of the LoanAgreement, you must include the Note Disclosure.Closed-End Consumer Lending User Guide 65

Variable Rate Sample 31. Index or Change Occurrence: Discontinuing Payroll Deduction will result in 1.00% increase2. Margin: N/A3. Rounding: N/A4. Frequency of Rate Change: N/A5. Interest Rate Ceiling / Maximum: N/A6. Interest Rate Floor / Minimum: N/A7. Periodic Cap: N/A8. Effect of Increase: Higher payment amounts“Fed Box” Disclosure: The APR may increase during the term of this transaction if youdiscontinue payroll deduction. At that time the rate will increase by 1.00%. The increase in theinterest rate will result in higher payments for the same period of time. If your loan were for$__________ at __________% for (term), and the rate increased to __________% after (timeperiod), the payment you would make would be $__________.Note Disclosure: The interest rate is subject to change as follows: if you discontinue thededuction of your payment from payroll the interest rate will increase by 1.00%. Any increase inthe interest rate will result in higher payments.9. Placement of variable rate contract language on documents:Paper Documents – You must include the variable rate “Fed Box” disclosure in the “VariableRate” section of the Truth in Lending Disclosure.Electronic Documents – You must include the variable rate “Fed Box” disclosure in the“Variable Rate” section of the Truth in Lending Disclosure. Plus, in the “Promise to Pay” sectionof the Loan Agreement, you must include the Note Disclosure.Closed-End Consumer Lending User Guide 66

Variable Rate Sample 41. Index or Change Occurrence: Credit union’s regular share dividend rate2. Margin: 3.00%3. Rounding: Up to the next 0.50%4. Frequency of Rate Change: Quarterly on the first day of February, May, August andNovember5. Interest Rate Ceiling / Maximum: N/A6. Interest Rate Floor / Minimum: 6.00%7. Periodic Cap: N/A8. Effect of Increase: Larger amount due at maturity“Fed Box” Disclosure: The APR may increase during the term of this transaction if the creditunion’s regular share dividend rate increases. We will add a margin of 3.00% to the IndexValue and then round up to the next 0.50%. The rate will change quarterly on the first day ofFebruary, May, August and November. The rate will never be less than 6.00%. Any interest rateincrease will result in a larger amount due at maturity. If your loan were for $__________ at__________% for (term), and the rate increased to __________% after (time period), your finalpayment would increase to $__________.Note Disclosure: The interest rate is subject to change as follows: the APR may increaseduring the term of this transaction if: the credit union’s regular share dividend rate increases. Wewill add a margin of 3.00% to the Index Value and then round up to the next 0.50%. The rate willchange quarterly on the first day of February, May, August and November. The rate will never beless than 6.00%. Any interest rate increase will result in a larger amount due at maturity.9. Placement of variable rate contract language on documents:Paper Documents – You must include the variable rate “Fed Box” disclosure in the “VariableRate” section of the Truth in Lending Disclosure.Electronic Documents – You must include the variable rate “Fed Box” disclosure in the“Variable Rate” section of the Truth in Lending Disclosure. Plus, in the “Promise to Pay” sectionof the Loan Agreement, you must include the Note Disclosure.Closed-End Consumer Lending User Guide 67

Variable Rate Sample 51. Index or Change Occurrence: 90 Day Certificate2. Margin: 2.00%3. Rounding: Up to the next 0.25%4. Frequency of Rate Change: Monthly5. Interest Rate Ceiling / Maximum: 10.00%6. Interest Rate Floor / Minimum: 5.00%7. Periodic Cap: 0.25% per change date8. Effect of Increase: Larger amount due at maturity“Fed Box” Disclosure: The APR may increase during the term of this transaction if thedividend rate being paid on the credit union’s 90-day Certificate (Index) changes. We will adda margin of 2.00% to the Index Value and then round up to the next 0.25%. The APR will notincrease more than 0.25% per change date, will never exceed 10.00% and will never decreasebelow 5.00%. Any increase in the APR will result in a larger payment due at maturity. example: Ifyou borrowed $__________ at __________% for (term), and it increased to __________% after(time period), your payment at maturity would be $__________.Note Disclosure: The interest rate is subject to change as follows: the interest rate is based onthe dividend rate being paid on the credit union’s 90 Day Certificate of Deposit plus 2.00% andwill be rounded up to the next 0.25%. The interest rate can change monthly. The interest ratewill not change more than 0.25% per month, will never exceed 10.00% and will never decreasebelow 5.00%. Any increase in the interest rate will result in a lager payment due at maturity.9. Placement of variable rate contract language on documents:Paper Documents – You must include the variable rate “Fed Box” disclosure in the “VariableRate” section of the Truth in Lending Disclosure.Electronic Documents – You must include the variable rate “Fed Box” disclosure in the“Variable Rate” section of the Truth in Lending Disclosure. Plus, in the “Promise to Pay” sectionof the Loan Agreement, you must include the Note Disclosure.Closed-End Consumer Lending User Guide 68

Chapter 7:Sample LoansSample 1 – Refinance Existing LoanLoan Scenario:Refinance an existing loan to include new funds for vacation and finance the filing fee. Payment ismonthly. The member’s wife is not liable on the loan, she is only signing as joint owner of collateral.Details:On June 1, 2013 John Q. Member requests a loan for $2,700.00 for a vacation and $7,300.00 toconsolidate an old loan balance ($6,644.75 unpaid balance plus $655.25 accrued interest).He is offering a used 2011 Toyota Camry for security, which both he and his wife, Cathy, own. TheCamry has a value of $16,000.00 with ID No. 21679147-3.Your credit union requires the borrower to pay a $4.00 filing fee. John wants the $4.00 financed in theloan.John has elected both credit disability and credit life insurance on himself. The insurance cost isadded to the loan balance monthly.Your credit union does not offer property insurance, however, they require John to obtain suchinsurance.The first payment is due July 1, 2013. The interest rate is 7.00%. The loan is to be repaid in threeyears.Closed-End Consumer Lending User Guide 69

Sample 1SAMPLE 1Thank You For Borrowing At Your Credit UnionLOAN AND SECURITY AGREEMENTSAND DISCLOSURE STATEMENTFixed Rate Variable Rate Loan Date Loan NumberAccount Number1X 6-1-20132795 460712Borrower 1 Name and Address Borrower 2 Name (and address if different from Borrower 1)John Q. Member1234 Main StreetAnytown, USA 12345Cathy MemberTRUTH IN LENDING DISCLOSURE ‘e’ means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGEAmount FinancedThe amount of credit provided to youTotal of PaymentsThe amount you will have paid after youTotal Sale PriceThe total cost of your purchase on credit isThe cost of your credit as a yearly rate. The dollar amount the credit will cost you.or on your behalf.have made all payments as scheduled.27.00 % $ 1,132.43 3 $ 10,004.00 4 $ 11,591.98 5 $Filing FeesNon-Filing Insurancewhich includes your downpayment of$ 4.00 6 $ N/A 7$Variable Rate: N/A8Prepayment: If you pay off early you will not have to pay a penalty. Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any.Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union. If you get the insurance from us, you will pay$ N/A 9Late Charge: 10 20% of interest due if 7 or more days late, minimum of $5.00, maximum of $20.00.Your Payment Number of Payments Amount of Payments When Payments Are DueSchedule will be:35 11 $322.01 12 Monthly Beginning 13 7/1/20131$321.636/1/2016Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in your shares and dividends and, if any, yourdeposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/MakeYear I.D. Number Type/Lien Amount Value Key NumberAuto – Toyota Camry 2011 21679147-3 2-door $16,000.00 08489914Other (Describe):Pledge of Shares $ in Account Number $ in Account NumberSEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to Directly Amount Paid on Your Account Prepaid Finance ChargeYou15 $ 10,004.00 a $ 2,700.00b $ 7,300.00 c $ N/AdAmount Paid to Others $ 4.00To$Toon Your BehalfePublic OfficersN/A$ N/ATo IF AN AMOUNT IS MARKED WITH AN $ ASTERISK N/A ( *), WE WILL BE To RETAINING A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse sideCONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE16 1. Promise to Pay: You promise to pay $ 10,004.00 to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rateloans the interest rate is 7.00 % per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is N/A % per year. 2. These Agreements are governed by the laws of ____________________________________________.Kansas 173. Collection Costs:18SIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.19 X John Q. Member6-1-2013 X(SEAL)(SEAL)BORROWER 1DATEBORROWER 2DATEX Cathy Member6-1-2013 X(SEAL)(SEAL)OTHER BORROWER OWNER OF PROPERTY WITNESSDATEOTHER BORROWER OWNER OF PROPERTY WITNESSDATECREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willreceive written notice before any increase goes into effect. You have theright to stop this insurance by notifying your credit union in writing. Yoursignature below means you agree that:• If you elect insurance, you authorize the credit union to add the chargesfor insurance to your loan each month.• You are eligible for disability insurance only if you are working for wagesor profit for 25 hours a week or more on the date of any advance. If youare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.• You are eligible for insurance up to the Maximum Age for Insurance.Insurance will stop when you reach that age.NOTE: THE LIFE AND DISABILITY INSURANCE CONTAINS CERTAIN BENEFITEXCLUSIONS, INCLUDING A PRE-EXISTING CONDITION EXCLUSION.PLEASE REFER TO YOUR CERTIFICATE FOR DETAILS.20 YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULE COVERED MEMBER (Please Print)SINGLE CREDIT DISABILITY$ 329.55 e John Q. MemberXSINGLE CREDIT LIFEJOINT CREDIT LIFEXX$ 126.00 e$ eJohn Q. MemberIf you are totally disabled for more than 30 days, then the disability benefit will begin with the 31st day of disability.GROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOAN INSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFITDISABILITY$ 600LIFEN/AXXX-XXXX-XDATE OF ISSUE OF THIS CERTIFICATEMAX. INSURABLE BALANCE PER LOAN ACCOUNTMAX. AGE FOR INSURANCE$30,00066$30,00070MEMBER’S DATE OF BIRTH4-23-59XJOINT INSURED’S DATE OF BIRTHJohn Q. Member 6/1/2013SECONDARY BENEFICIARY (If you desire to name one)SIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATEAPP. 825-0786(Only required if JOINT CREDIT LIFE coverage is selected)X© CUNA Mutual Group 2000, 04-06, 08, 11, 12 All Rights Reserved CREDIT UNION COPY NXX01BClosed-End Consumer Lending User Guide 70

Explanation of Sample 11. Fixed/Variable Rate – In this example, the interest rate is fixed, so the “Fixed Rate” box ischecked.2. Annual Percentage Rate – In this example, the APR and the contract interest rate are thesame. This is because there are no other components of the finance charge other than simpleinterest.3. Finance Charge – This is the dollar amount of a contract rate of 7.00% on $10,004.00 for 36months.4. Amount Financed – This amount will be $10,004.00. It includes $2,700.00 for a vacation,$7,300.00 to refinance a loan and the $4.00 filing fee. The cost of credit insurance is not includedin the amount financed.5. Total of Payments – The amount of payments times the number of payments equals the total ofpayments. The cost of credit insurance is included in the total of payments. When monthly creditinsurance is included in the payment, the finance charge plus the amount financed will not equalthe total of payments.6. Filing Fee – In this example, the filing fee is financed in the amount of $4.00. If your credit unionpasses the cost of a filing fee onto your borrowers, the amount must be disclosed in this section,whether paid in cash or financed. A filing fee is not a finance charge.7. Non-Filing Insurance – In this example, the credit union does not have non-filing insurance.If you charge a borrower more for non-filing insurance than it would cost for actually filing, theadditional cost is a finance charge.8. Variable Rate – This example is for a fixed rate loan. The “Variable Rate” section is notapplicable and should state ”N/A”.9. Property Insurance – If your credit union requires a borrower to obtain this insurance, the costmust only be disclosed if the borrower purchases the insurance through your credit union at thetime the loan is disbursed. If your credit union doesn’t offer insurance, then use ”N/A”.10. Late Charge – For this example, the late charge is 20% of interest due if seven or more dayslate with a minimum of $5.00 and maximum of $20.00. If your credit union charges a late charge,it must be disclosed.11. Number of Payments – The number of payments required to repay the loan.12. Amount of Payments – The payments include the cost of both credit disability and single creditlife.13. When Payments are Due – State the frequency (monthly, bi-weekly, etc.) of payments as wellas due date of first payment and last payment.14. Security – A full description of the collateral should be shown in the “Security” section of theTruth in Lending Disclosure.Closed-End Consumer Lending User Guide 71

Explanation of Sample 1 (continued)15. Itemization of Amount Financed –a) “Itemization of Amount Financed” is the amount financed figure of $10,004.00.b) “Amount Given to You Directly” is the amount disbursed to the borrower equal to $2,700.00for a vacation.c) “Amount Paid on Your Account” is $7,300.00, the amount used to pay off the old loanbalance.d) “Prepaid Finance Charge” is not applicable since there are no additional prepaid financecharges on this loan and should be marked ”N/A”.e) “Amount Paid to Others on Your Behalf” is $4.00 for the financed filing fee being paid to publicofficials.16. Promise to Pay – For this example, the loan proceeds of $10,004.00 and the interest rateof 7.00% are inserted. The interest rate is the same as the APR since the interest is the onlycomponent of the finance charge.17. Governing Law – For this example, the credit union has chosen to enter the state that appliesfor the governing law provision. This is an optional field.18. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are disclosed here.19. Signature – John Member signs as the borrower and his wife signs as Owner of Collateral; she isnot liable on the loan. If Cathy had been liable on the loan, she would have signed as Borrower 2.20. Credit Insurance Enrollment – The borrower must check the appropriate box(es) under the“Election of Insurance” section. For this example, John has chosen both credit disability andsingle credit life – X’s have been made in the “Yes” box under Credit Disability and Credit Life.Since the cost of the insurance is an estimate, an (e) is printed on the document in the premiumschedule. Your credit union must obtain the insured’s signature and date of birth.Closed-End Consumer Lending User Guide 72

Sample 2 – Share Secured LoanLoan Scenario:Request for a share secured loan to purchase furniture. Payment is monthly.Details:On June 1, 2013 John Q. Member requests a share secured loan for $10,000.00 to purchasefurniture.He is offering $10,000.00 from a share account to be used as security. The account number is1234-1.John has elected both credit disability and single credit life insurance. The insurance cost is added tothe loan balance monthly.The first payment is due July 1, 2013. The interest rate is 4.00%. The loan is to be repaid in fiveyears.Closed-End Consumer Lending User Guide 73

Sample 2SAMPLE 2Thank You For Borrowing At Your Credit UnionLOAN AND SECURITY AGREEMENTSAND DISCLOSURE STATEMENTFixed Rate Variable Rate Loan Date Loan NumberAccount Number1X 6-1-20132796 460712Borrower 1 Name and Address Borrower 2 Name (and address if different from Borrower 1)John Q. Member1234 Main StreetAnytown, USA 12345TRUTH IN LENDING DISCLOSURE ‘e’ means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGEAmount FinancedThe amount of credit provided to youTotal of PaymentsThe amount you will have paid after youTotal Sale PriceThe total cost of your purchase on credit isThe cost of your credit as a yearly rate. The dollar amount the credit will cost you.or on your behalf.have made all payments as scheduled.24.00 % $ 1,074.41 3 $ 10,000.00 4 $ 11,831.08 5 $Filing FeesNon-Filing Insurancewhich includes your downpayment of$ N/A 6 $ N/A 7$Variable Rate: N/A8Prepayment: If you pay off early you will not have to pay a penalty. Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any.Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union. If you get the insurance from us, you will pay$ N/A 9Late Charge: 10 20% of interest due if 7 or more days late, minimum of $5.00, maximum of $20.00.Your Payment Number of Payments Amount of Payments When Payments Are DueSchedule will be:59 11 $197.19 12 Monthly Beginning 13 7/1/20131$196.876/1/2018Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in your shares and dividends and, if any, yourdeposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/MakeYear I.D. Number Type/Lien Amount Value Key Number14Other (Describe):Pledge of Shares $ in Account Number $ in Account NumberSEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to Directly Amount Paid on Your Account Prepaid Finance ChargeYou15 $ 10,000.00 a $ 10,000.00 b $ N/A c $ N/A dAmount Paid to Others $on Your BehalfeTo$To$ N/A To N/A IF AN AMOUNT IS MARKED WITH AN $ ASTERISK N/A ( *), WE WILL BE To RETAINING N/A A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse sideCONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE16 1. Promise to Pay: You promise to pay $ 10,000.00 to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rateloans the interest rate is 4.00 % per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is N/A % per year. 2. These Agreements are governed by the laws of ____________________________________________.Kansas 173. Collection Costs:18SIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.19X John Q. Member6-1-2013 X(SEAL)(SEAL)BORROWER 1DATEBORROWER 2DATEXOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSDATEXOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willreceive written notice before any increase goes into effect. You have theright to stop this insurance by notifying your credit union in writing. Yoursignature below means you agree that:• If you elect insurance, you authorize the credit union to add the chargesfor insurance to your loan each month.• You are eligible for disability insurance only if you are working for wagesor profit for 25 hours a week or more on the date of any advance. If youare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.• You are eligible for insurance up to the Maximum Age for Insurance.Insurance will stop when you reach that age.NOTE: THE LIFE AND DISABILITY INSURANCE CONTAINS CERTAIN BENEFITEXCLUSIONS, INCLUDING A PRE-EXISTING CONDITION EXCLUSION.PLEASE REFER TO YOUR CERTIFICATE FOR DETAILS.20 YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULE COVERED MEMBER (Please Print)SINGLE CREDIT DISABILITYX $ 547.35 e John Q. MemberDATESINGLE CREDIT LIFEJOINT CREDIT LIFEXX$ 209.32 e$ eJohn Q. MemberIf you are totally disabled for more than 30 days, then the disability benefit will begin with the 31st day of disability.GROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOAN INSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFITDISABILITY$ 600LIFEN/AXXX-XXXX-XDATE OF ISSUE OF THIS CERTIFICATEMAX. INSURABLE BALANCE PER LOAN ACCOUNTMAX. AGE FOR INSURANCE$30,00066$30,00070MEMBER’S DATE OF BIRTH4-23-59XJOINT INSURED’S DATE OF BIRTHJohn Q. Member 6/1/2013SECONDARY BENEFICIARY (If you desire to name one)SIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATEAPP. 825-0786(Only required if JOINT CREDIT LIFE coverage is selected)X© CUNA Mutual Group 2000, 04-06, 08, 11, 12 All Rights Reserved CREDIT UNION COPY NXX01BClosed-End Consumer Lending User Guide 74

Explanation of Sample 2 (continued)15. Itemization of Amount Financed –a) “Itemization of Amount Financed” is the amount financed figure of $10,000.00.b) “Amount Given to You Directly” is the amount disbursed to the borrower equal to $10,000.00for furniture.c) “Amount Paid on Your Account” is not applicable since your borrower is not paying off anyexisting loan balance with the credit union and should be marked ”N/A”.d) “Prepaid Finance Charge” is not applicable since there are no additional prepaid financecharges on this loan and should be marked ”N/A”.e) “Amount Paid to Others on Your Behalf” is not applicable since no fees were paid on yourborrower’s behalf and should be marked ”N/A”.16. Promise to Pay – For this example, the loan proceeds of $10,000.00 and the interest rateof 4.00% are inserted. The interest rate is the same as the APR, since the interest is the onlycomponent of the finance charge.17. Governing Law – For this example, the credit union has chosen to enter the state that appliesfor the governing law provision. This is an optional field.18. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are disclosed here.19. Signature – John Member signs as the borrower.20. Credit Insurance Enrollment – The borrower must check the appropriate box(es) under the“Election of Insurance” section. For this example, John has chosen both credit disability andsingle credit life – X’s have been made in the “Yes” box under Credit Disability and Credit Life.Since the cost of the insurance is an estimate, an (e) is printed on the document in the premiumschedule. Your credit union must obtain the insured’s signature and date of birth.Closed-End Consumer Lending User Guide 76

Sample 3 – Automobile Purchase/Debt PayoffLoan Scenario:Request a loan for $16,000.00 to purchase a new car and pay off ABC Department Store in theamount of $1,000.00 and Easy Charge, Inc. $1,200.00.Details:On June 1, 2013 John Q. Member requests a loan for $16,000.00 to purchase a new car, and hewants your credit union to pay off ABC Department Store in the amount of $1,000.00 and EasyCharge, Inc. in the amount of $1,200.00.He is offering a new 2011 Mercury Cougar for security. The Cougar has a value of $23,000.00 with IDnumber H1497564A.Your credit union requires the borrower to pay a $4.00 filing fee. John wants to pay the fee in cash.John has elected to purchase an extended warranty in the amount of $260.00 from your credit union.The credit union has “upcharged” the price of the warranty, meaning that the borrower is beingcharged more for the warranty than it costs the credit union. He has also elected to purchase creditdisability and credit life.The first payment is due July 1, 2013. The interest rate is 7.50%. The loan is to be repaid in sixyears.Closed-End Consumer Lending User Guide 77

Sample 3SAMPLE 3Thank You For Borrowing At Your Credit UnionLOAN AND SECURITY AGREEMENTSAND DISCLOSURE STATEMENTFixed Rate Variable Rate Loan Date Loan NumberAccount Number1X 6-1-20131A 123456Borrower 1 Name and Address Borrower 2 Name (and address if different from Borrower 1)John Q. Member1234 Main StreetAnytown, USA 12345TRUTH IN LENDING DISCLOSURE ‘e’ means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGEAmount FinancedThe amount of credit provided to youTotal of PaymentsThe amount you will have paid after youTotal Sale PriceThe total cost of your purchase on credit isThe cost of your credit as a yearly rate. The dollar amount the credit will cost you.or on your behalf.have made all payments as scheduled.27.50 % $ 4,640.43 3 $ 18,460.00 4 $ 24,843.47 5 $Filing FeesNon-Filing Insurancewhich includes your downpayment of$ 4.00 6 $ N/A 7$Variable Rate: N/A8Prepayment: If you pay off early you will not have to pay a penalty. Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any.Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union. If you get the insurance from us, you will pay$ N/A 9Late Charge: 10 20% of interest due if 7 or more days late, minimum of $5.00, maximum of $20.00.Your Payment Number of Payments Amount of Payments When Payments Are DueSchedule will be:71 11 $345.05 12 Monthly Beginning 13 7/1/20131$344.926/1/2019Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in your shares and dividends and, if any, yourdeposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/MakeYear I.D. Number Type/Lien Amount Value Key NumberAuto – Mercury Cougar 2011 H1497564A 2-door $23,000.00 454514Other (Describe):Pledge of Shares $ in Account Number $ in Account NumberSEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to Directly Amount Paid on Your Account Prepaid Finance ChargeYou15 $ 18,460.00 a $ 16,000.00 b $ N/A c $ N/A dAmount Paid to Otherson Your Behalf$ 260.00*e To Auto Warranty Corp.$ 1,200.00 To Easy Charge, Inc.$ 1,000.00 To ABC Department IF AN AMOUNT Store IS MARKED WITH AN $ ASTERISK N/A ( *), WE WILL BE To RETAINING A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse sideCONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE16 1. Promise to Pay: You promise to pay $ 18,460.00 to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rateloans the interest rate is 7.50 % per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is N/A % per year. 2. These Agreements are governed by the laws of ____________________________________________.Kansas 173. Collection Costs:18SIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.19X John Q. Member7-1-2013 X(SEAL)(SEAL)BORROWER 1DATEBORROWER 2DATEXOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESS“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willreceive written notice before any increase goes into effect. You have theright to stop this insurance by notifying your credit union in writing. Yoursignature below means you agree that:• If you elect insurance, you authorize the credit union to add the chargesfor insurance to your loan each month.20SINGLE CREDIT DISABILITYXDATEXOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644DATE• You are eligible for disability insurance only if you are working for wagesor profit for 25 hours a week or more on the date of any advance. If youare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.• You are eligible for insurance up to the Maximum Age for Insurance.Insurance will stop when you reach that age.NOTE: THE LIFE AND DISABILITY INSURANCE CONTAINS CERTAIN BENEFITEXCLUSIONS, INCLUDING A PRE-EXISTING CONDITION EXCLUSION.PLEASE REFER TO YOUR CERTIFICATE FOR DETAILS.YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULE COVERED MEMBER (Please Print)$ 1,260.93 e John Q. MemberSINGLE CREDIT LIFEJOINT CREDIT LIFEXX$ 482.11 e$ eJohn Q. MemberIf you are totally disabled for more than 30 days, then the disability benefit will begin with the 31st day of disability.GROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOAN INSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFITDISABILITY$ 600LIFEN/AXXX-XXXX-XDATE OF ISSUE OF THIS CERTIFICATEMAX. INSURABLE BALANCE PER LOAN ACCOUNTMAX. AGE FOR INSURANCE$30,00066$30,00070MEMBER’S DATE OF BIRTH4-23-59XJOINT INSURED’S DATE OF BIRTHJohn Q. Member 7/1/2013SECONDARY BENEFICIARY (If you desire to name one)SIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATEAPP. 825-0786(Only required if JOINT CREDIT LIFE coverage is selected)X© CUNA Mutual Group 2000, 04-06, 08, 11, 12 All Rights Reserved CREDIT UNION COPY NXX01BClosed-End Consumer Lending User Guide 78

Explanation of Sample 31. Fixed/Variable Rate – In this example, the interest rate is fixed so the “Fixed Rate” box ischecked.2. Annual Percentage Rate – In this example, the APR and the contract Interest rate are thesame. This is because there are no other components of the finance charge other than simpleinterest.3. Finance Charge – This is the dollar amount of a contract rate of 4.50% on $18,460.00 for 72months.4. Amount Financed – This amount will be $18,460.00. It includes $16,000.00 for the car,$1,000.00 to ABC Department Store, $1,200.00 to Easy Charge, Inc. and $260.00 for theextended warranty. The cost of credit insurance is not included in the amount financed.5. Total of Payments – The amount of payments times the number of payments equals the total ofpayments. The cost of credit insurance is included in the total of payments. When monthly creditinsurance is included in the payments, the finance charge plus the amount financed will notequal the total of payments.6. Filing Fee – In this example, the filing fee of $4.00 is paid in cash. Even though it is paid in cash,when your credit union passes the cost of the filing fee on to your borrower, the amount must bedisclosed in this section whether paid in cash or financed.7. Non-Filing Insurance – In this example, the credit union does not have non-filing insurance.A credit union cannot charge a borrower more for non-filing insurance than it would cost foractually filing, unless the additional cost is added to the finance charge.8. Variable Rate – This example is for a fixed rate loan. The “Variable Rate” section is notapplicable and should be marked ”N/A”.9. Property Insurance – If your credit union requires a borrower to obtain this insurance, the costmust only be disclosed if the borrower purchases the insurance through your credit union at thetime the loan is disbursed. If your credit union doesn’t offer insurance, then use ”N/A”.10. Late Charge – For this example, the late charge is 20% of interest due if seven or more dayslate with a minimum of $5.00 and maximum of $20.00. If your credit union charges a late charge,it must be disclosed.11. Number of Payments – The number of payments required to repay the loan is 72.12. Amount of Payments – The payments include the cost of both credit disability and singlecredit life.13. When Payments are Due – State the frequency (monthly, bi-weekly, etc.) of payments as wellas due date of first payment and last payment.14. Security – For this example, the collateral is the new car. A full description of the collateralshould be shown in the “Security” section of the Truth in Lending Disclosure.Closed-End Consumer Lending User Guide 79

Explanation of Sample 3 (continued)15. Itemization of Amount Financed –a) Itemization of Amount Financed” is the amount financed figure of $18,460.00.b) “Amount Given to You Directly” is the amount disbursed to the borrower equal to $16,000.00for the car.c) “Amount Paid on Your Account” is not applicable since your borrower is not paying off anyexisting loan balance with the credit union and should be marked ”N/A”.d) “Prepaid Finance Charge” is not applicable since there are not any additional prepaid financecharges on this loan and should be marked ”N/A”.e) “Amount Paid to Others on Your Behalf” is $260.00 for the extended warranty payable toAuto Warranty Corp. There is an asterisk by this since the credit union is retaining a portionof the amount. $1,000.00 was paid directly to ABC Department Store and $1,200.00 waspaid directly to Easy Charge, Inc. (Since the borrower directed the credit union to pay thesebills directly, they are shown here; however, if the monies would have been distributed to theborrower, they would have been disclosed under “Amount Given to You Directly.”) Note: The$4.00 filing fee was not included in the “Itemization of Amount Financed” because it was paidin cash.16. Promise to Pay – For this example, the loan proceeds of $18,460.00 and the interest rateof 7.50% are inserted. The interest rate is the same as the APR, since the interest is the onlycomponent of the finance charge.17. Governing Law – For this example, the credit union has chosen to enter the state that appliesfor the governing law provision. This is an optional field.18. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are disclosed here.19. Signature – John Member signs as the borrower, as sole owner of the car.20. Credit Insurance Enrollment – The borrower must check the appropriate box(es) under the“Election of Insurance” section. For this example, John has chosen both credit disability andsingle credit life – X’s have been made in the “Yes” box under Credit Disability and Credit Life.Since the cost of the insurance is an estimate, an (e) is printed on the document in the premiumschedule. Your credit union must obtain the insured’s signature and date of birth.Closed-End Consumer Lending User Guide 80

Sample 4 – Variable RateLoan Scenario:Purchase a boat.Details:On June 1, 2013 John Q. Member requests a loan for $10,000.00 to purchase a boat.He is offering the boat as security.John elects credit disability insurance and declines credit life insurance.Your credit union does not offer property insurance; however, they require John to obtain suchinsurance.The first payment is due July 1, 2013. The interest rate is variable and the initial rate is 6.00%. Theloan is to be repaid in five years.Closed-End Consumer Lending User Guide 81

Sample 4SAMPLE 4Thank You For Borrowing At Your Credit UnionLOAN AND SECURITY AGREEMENTSAND DISCLOSURE STATEMENTFixed Rate Variable Rate Loan Date Loan NumberAccount Number1 X 6-1-201328B 12347Borrower 1 Name and Address Borrower 2 Name (and address if different from Borrower 1)John Q. Member1234 Main StreetAnytown, USA 12345TRUTH IN LENDING DISCLOSURE ‘e’ means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGEAmount FinancedThe amount of credit provided to youTotal of PaymentsThe amount you will have paid after youTotal Sale PriceThe total cost of your purchase on credit isThe cost of your credit as a yearly rate. The dollar amount the credit will cost you.or on your behalf.have made all payments as scheduled.26.00 % $ 1,719.64 3 $ 10,000.00 4 $ 12,291.62 5 $Filing FeesNon-Filing Insurancewhich includes your downpayment of$ N/A 6 $ N/A 7$Variable Rate: Variable Rate: The annual percentage rate may increase during the term of this transaction if the Prime Rate published in the Wall Street Journal (Index)changes. We will add a margin of 2.5% to the index value. The rate will change monthly on the first day of the month. The rate will never be higher than the maximumrate allowed by law, and it will never be less than 6%. Any interest rate increase will result in more payments of the same amount.If your loan were for $10,000 at 10% for 60 months, and the rate increased to 10.5% after 6 months, you will have to make one additional payment.8Prepayment: If you pay off early you will not have to pay a penalty. Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any.Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union. If you get the insurance from us, you will pay$ N/A 9Late Charge: N/A 10Your Payment Number of Payments Amount of Payments When Payments Are DueSchedule will be:59 11 $202.99 12 Monthly Beginning 13 7/1/20131$112.226/1/2018Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in your shares and dividends and, if any, yourdeposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/MakeYear I.D. Number Type/Lien Amount Value Key NumberBoat 30 ft. 2009 ZX12479YZ N/A $17,000.0014Other (Describe):Pledge of Shares $ in Account Number $ in Account NumberSEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to Directly Amount Paid on Your Account Prepaid Finance ChargeYou15 $ 10,000.00 a $ 10,000.00 b $ N/A c $ N/A dAmount Paid to Others $on Your Behalfe To$To$ N/A To N/A IF AN AMOUNT IS MARKED WITH AN $ ASTERISK N/A ( *), WE WILL BE To RETAINING N/A A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse sideCONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE16 1. Promise to Pay: You promise to pay $ 10,000.00 to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rateloans the interest rate is N/A % per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is 6.00 % per year. 2. These Agreements are governed by the laws of ____________________________________________.Kansas 173. Collection Costs:18SIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.19 X John Q. Member6-1-2013(SEAL)X(SEAL)BORROWER 1DATEBORROWER 2DATEXOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSDATE“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willreceive written notice before any increase goes into effect. You have theright to stop this insurance by notifying your credit union in writing. Yoursignature below means you agree that:• If you elect insurance, you authorize the credit union to add the chargesfor insurance to your loan each month.XOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644DATE• You are eligible for disability insurance only if you are working for wagesor profit for 25 hours a week or more on the date of any advance. If youare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.• You are eligible for insurance up to the Maximum Age for Insurance.Insurance will stop when you reach that age.NOTE: THE LIFE AND DISABILITY INSURANCE CONTAINS CERTAIN BENEFITEXCLUSIONS, INCLUDING A PRE-EXISTING CONDITION EXCLUSION.PLEASE REFER TO YOUR CERTIFICATE FOR DETAILS.20 YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULE COVERED MEMBER (Please Print)SINGLE CREDIT DISABILITY$ 553.61 e John Q. MemberXSINGLE CREDIT LIFEJOINT CREDIT LIFEXX$ e$ eIf you are totally disabled for more than 30 days, then the disability benefit will begin with the 31st day of disability.GROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOAN INSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFITDISABILITY$ 600LIFEN/AXXX-XXXX-XDATE OF ISSUE OF THIS CERTIFICATEMAX. INSURABLE BALANCE PER LOAN ACCOUNTMAX. AGE FOR INSURANCE$30,00066$30,00070MEMBER’S DATE OF BIRTH4-23-59XJOINT INSURED’S DATE OF BIRTHJohn Q. Member 6/1/2013SECONDARY BENEFICIARY (If you desire to name one)SIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATEAPP. 825-0786(Only required if JOINT CREDIT LIFE coverage is selected)X© CUNA Mutual Group 2000, 04-06, 08, 11, 12 All Rights Reserved CREDIT UNION COPY NXX01BClosed-End Consumer Lending User Guide 82

Explanation of Sample 41. Fixed/Variable Rate – In this example, the interest rate is variable, so the “Variable Rate” box ischecked.2. Annual Percentage Rate – In this example, the APR and the contract Interest rate are 6.00%.3. Finance Charge – This is the dollar amount of a contract rate of 6.00% for 60 months.4. Amount Financed – The amount will be $10,000.00 for the boat.5. Total of Payments – The amount of payments times the number of payments equals the total ofpayments. The cost of the credit disability insurance is included in the total of payments.6. Filing Fee – In this example, there is no filing fee. If your credit union passes the cost of a filingfee onto your borrowers, the amount must be disclosed in this section, whether paid in cash orfinanced.7. Non-Filing Insurance – In this example, the credit union does not have non-filing insurance.A credit union cannot charge a borrower more for non-filing insurance than it would cost foractually filing, unless the additional cost is added to the finance charge.8. Variable Rate – This example is for a variable rate loan, variable rate language would appearas follows: The APR may increase during the term of this transaction if the Prime Rate publishedin The Wall Street Journal (Index) changes. We will add a margin of 2.50% to the index value.The rate will change monthly on the first day of the month. The rate will never be higher than themaximum rate allowed by law, and it will never be less than 6.00%. Any interest rate increasesresult in more payments of the same amount. The note disclosure would also need to appear. Inthis example the note disclosure is: If your loan were for $10,000.00 at 10.00% for 60 months,and the rate increased to 10.50% after 6 months, you will have to make one additional payment.9. Property Insurance – If your credit union requires a borrower to obtain this insurance, the costmust only be disclosed if the borrower purchases the insurance through your credit union at thetime the loan is disbursed. If your credit union doesn’t offer insurance, then use ”N/A”.10. Late Charge – For this example, there is no late charge, so N/A is used. If your credit unioncharges a late charge, it must be disclosed.11. Number of Payments – For this example, the number of payments required to repay the loanis 60.12. Amount of Payments – The payments include the cost of credit disability insurance.13. When Payments are Due – State the frequency (monthly, bi-weekly, etc.) of payments as wellas due date of first payment and the last payment.14. Security – For this example, the collateral is the boat. A full description of the collateral shouldbe shown in the “Security” section of the Truth in Lending Disclosure.Closed-End Consumer Lending User Guide 83

Explanation of Sample 4 (continued)15. Itemization of Amount Financed –a) “Itemization of Amount Financed” is the amount financed figure of $10,000.00.b) “Amount Given to You Directly” is the amount disbursed to the borrower equal to $10,000.00for the boat.c) “Amount Paid on Your Account” is not applicable since your borrower is not paying off anyexisting loan balance with the credit union and should be marked ”N/A”.d) “Prepaid Finance Charge” is not applicable since there are no prepaid finance charges andshould be marked ”N/A”.e) “Amount Paid to Others on Your Behalf” is not applicable since your credit union is not payingoff any other amounts to others and should be marked ”N/A”.16. Promise to Pay – For this example, the loan proceeds of $10,000.00 and the initial interest rateof 6.00% are inserted.17. Governing Law – For this example, the credit union has chosen to enter the state that appliesfor the governing law provision. This is an optional field.18. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are disclosed here.19. Signature – John Member signs as the borrower.20. Credit Insurance Enrollment – The borrower must check the appropriate box(es) under the“Election of Insurance” section. For this example, John has chosen credit disability but declinedcredit life – X’s have been made in the “Yes” box under Credit Disability and checked “No” boxunder Credit Life. Make sure the borrower signs the credit insurance enrollment document,whether they elected insurance or not. Since the cost of the insurance is an estimate, an (e) isprinted on the document in the premium schedule.Closed-End Consumer Lending User Guide 84

Sample 5 – Motorcycle Purchase, Car Given as Collateral, Cash PrepaidFinance ChargeLoan Scenario:Purchase a motorcycle, pay off some existing revolving credit balances. A car is given as collateralfor the loan. This loan includes a prepaid finance charge, which is being paid for in cash.Details:On June 1, 2013 John Q. Member requests a loan for $10,000.00 to purchase a motorcycle.He is offering a 2011 Ford Taurus for security, with a value of $14,000.00 – ID No. 321098A.There is a prepaid finance charge of $100.00 which John is paying for in cash.John does not want either credit disability or credit life insurance.Your credit union does not offer property insurance; however, they require John to obtain suchinsurance.The first payment is due July 1, 2013. The interest rate is 6.00%. The loan is to be repaid in fouryears.Closed-End Consumer Lending User Guide 85

Sample 5SAMPLE 5Thank You For Borrowing At Your Credit UnionLOAN AND SECURITY AGREEMENTSAND DISCLOSURE STATEMENTFixed Rate Variable Rate Loan Date Loan NumberAccount Number1X 6-1-20136791 1234-1Borrower 1 Name and Address Borrower 2 Name (and address if different from Borrower 1)John Q. Member1234 Main StreetAnytown, USA 12345TRUTH IN LENDING DISCLOSURE ‘e’ means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGEAmount FinancedThe amount of credit provided to youTotal of PaymentsThe amount you will have paid after youTotal Sale PriceThe total cost of your purchase on credit isThe cost of your credit as a yearly rate. The dollar amount the credit will cost you.or on your behalf.have made all payments as scheduled.26.5230 % $ 1,374.33 3 $ 9,900.00 4 $ 11,274.33 5 $Filing FeesNon-Filing Insurancewhich includes your downpayment of$ N/A 6 $ N/A 7$Variable Rate: N/A8Prepayment: If you pay off early you will not have to pay a penalty. Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any.Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union. If you get the insurance from us, you will pay$ N/A 9Late Charge: 10 20% of interest due if 7 or more days late, minimum of $5.00, maximum of $20.00.Your Payment Number of Payments Amount of Payments When Payments Are DueSchedule will be:47 11 $234.89 12 Monthly Beginning 13 7/1/20131$234.506/1/2017Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in your shares and dividends and, if any, yourdeposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/MakeYear I.D. Number Type/Lien Amount Value Key NumberAuto – Ford Taurus 2011 321098A 4-door $14,000.00 317771914Other (Describe):Pledge of Shares $ in Account Number $ in Account NumberSEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to Directly Amount Paid on Your Account Prepaid Finance ChargeYou15 $ 9,900.00 a $ 10,000.00 b $ N/A c $ 100.00 dAmount Paid to Otherson Your Behalf$ N/AeTo$ N/ATo$ N/ATo IF AN AMOUNT IS MARKED WITH AN $ ASTERISK N/A ( *), WE WILL BE To RETAINING A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse sideCONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE16 1. Promise to Pay: You promise to pay $ 10,000.00 to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rateloans the interest rate is 6.00 % per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is N/A % per year. 2. These Agreements are governed by the laws of ____________________________________________.Kansas 173. Collection Costs:18SIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.19 X John Q. Member(SEAL)6/1/2013 X(SEAL)BORROWER 1DATEBORROWER 2DATEXOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSDATE“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willreceive written notice before any increase goes into effect. You have theright to stop this insurance by notifying your credit union in writing. Yoursignature below means you agree that:• If you elect insurance, you authorize the credit union to add the chargesfor insurance to your loan each month.XOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644DATE• You are eligible for disability insurance only if you are working for wagesor profit for 25 hours a week or more on the date of any advance. If youare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.• You are eligible for insurance up to the Maximum Age for Insurance.Insurance will stop when you reach that age.NOTE: THE LIFE AND DISABILITY INSURANCE CONTAINS CERTAIN BENEFITEXCLUSIONS, INCLUDING A PRE-EXISTING CONDITION EXCLUSION.PLEASE REFER TO YOUR CERTIFICATE FOR DETAILS.20 YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULE COVERED MEMBER (Please Print)SINGLE CREDIT DISABILITY$ eXSINGLE CREDIT LIFEJOINT CREDIT LIFEXX$ e$ eIf you are totally disabled for more than 30 days, then the disability benefit will begin with the 31st day of disability.GROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOAN INSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFITDISABILITY$ 600LIFEN/AXXX-XXXX-XDATE OF ISSUE OF THIS CERTIFICATEMAX. INSURABLE BALANCE PER LOAN ACCOUNTMAX. AGE FOR INSURANCE$30,00066$30,00070MEMBER’S DATE OF BIRTH4-23-59XJOINT INSURED’S DATE OF BIRTHJohn Q. Member 6/1/2013SECONDARY BENEFICIARY (If you desire to name one)SIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATEAPP. 825-0786(Only required if JOINT CREDIT LIFE coverage is selected)X© CUNA Mutual Group 2000, 04-06, 08, 11, 12 All Rights Reserved CREDIT UNION COPY NXX01BClosed-End Consumer Lending User Guide 86

Explanation of Sample 51. Fixed/Variable Rate – In this example, the interest rate is fixed, so the “Fixed Rate” box ischecked.2. Annual Percentage Rate – In this example, the APR and the contract Interest rate are different.This is because your credit union charges a prepaid finance charge. A prepaid finance chargeaffects the calculation of the APR, whether it is financed or paid in cash.3. Finance Charge – This is the dollar amount of a contract rate of 6.00% on $10,000.00 for 48months.4. Amount Financed – The amount will be $9,900.00. To obtain this amount, subtract $100.00 forthe prepaid finance charge from this loan.5. Total of Payments – The amount of payments times the number of payments equals the total ofpayments. The cost of credit insurance would be included in the total of payments, if John hadelected insurance.6. Filing Fee – In this example, there is no filing fee. If your credit union passes the cost of a filingfee onto your borrowers, the amount must be disclosed in this section, whether paid in cash orfinanced.7. Non-Filing Insurance – In this example, the credit union does not have non-filing insurance.A credit union cannot charge a borrower more for non-filing insurance than it would cost foractually filing, unless the additional cost is added to the finance charge.8. Variable Rate – This example is for a fixed rate loan. The “Variable Rate” section is notapplicable and should be marked ”N/A”.9. Property Insurance – If your credit union requires a borrower to obtain this insurance, the costmust only be disclosed if the borrower purchases the insurance through your credit union at thetime the loan is disbursed. If your credit union doesn’t offer insurance, then use ”N/A”.10. Late Charge – For this example, the late charge is 20% of interest due if seven (7) or more dayslate with a minimum of $5.00 and maximum of $20.00. If your credit union charges a late charge,it must be disclosed.11. Number of Payments – For this example, the number of payments required to repay the loan is48.12. Amount of Payments – The cost of the payment doesn’t include any insurance.13. When Payments are Due – State the frequency (monthly, bi-weekly, etc.) of payments as wellas due date of first payment and last payment.14. Security – For this example, the collateral is a car which John already owns. A full description ofthe collateral should be shown in the “Security” section of the Truth in Lending Disclosure.Closed-End Consumer Lending User Guide 87

Explanation of Sample 5 (continued)15. Itemization of Amount Financed – Notice that the dollar amounts do not add up when there isa prepaid finance charge.a) “Itemization of Amount Financed” is the amount financed figure of $9,900.00.b) “Amount Given to You Directly” is the amount disbursed to the borrower equal to $10,000.00for a motorcycle.c) “Amount Paid on Your Account” is not applicable since your borrower is not paying off anyexisting loan balance with the credit union and should be marked ”N/A”.d) “Prepaid Finance Charge” is $100.00, that John has paid in cash.e) “Amount Paid to Others on Your Behalf” is not applicable since your credit union is not payingoff any other amounts to others and should be marked ”N/A”.16. Promise to Pay – For this example, the loan proceeds of $10,000.00 and the interest rate of6.00% are inserted.17. Governing Law – For this example, the credit union has chosen to enter the state that appliesfor the governing law provision. This is an optional field.18. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are disclosed here.19. Signature – John Member signs as the borrower.20. Credit Insurance Enrollment – The borrower must check the appropriate box(es) under the“Election of Insurance” section. For this example, John has chosen neither credit disabilitynor credit life – X’s have been made in the “No” box under Credit Disability and Credit Life.Make sure the borrower signs the credit insurance enrollment document, whether they electedinsurance or not.Closed-End Consumer Lending User Guide 88

Sample 6 – Mobile HomeLoan Scenario:Purchase a mobile home.Details:On June 1, 2013 Joan Q. Member requests a loan for $25,000.00 to purchase a mobile home fortheir primary residence.She is offering a 2009 mobile home with a value of $30,000.00, ID No. 321098A.The credit union will charge a $10.00 credit report fee and a $90.00 appraisal fee, which Joan willpay for in cash.Joan does not want either credit disability or credit life insurance.Your credit union does not offer property insurance; however, they require Joan to obtain suchinsurance.The first payment is due July 1, 2013. The interest rate is 8.00%. The loan is to be repaid in sixyears.Closed-End Consumer Lending User Guide 89

Sample 6 – Page 1SAMPLE 6Loan and Security Agreementsand Disclosure StatementLOAN DATELOAN NUMBERACCOUNT NUMBERGROUP POLICY NUMBERMATURITY DATE6-1-2012 6791 1234-1 6-1-2018NAME AND ADDRESSJoan Q. Member1234 Main StreetAnytown, USA 12345BORROWER 1BORROWER 2NAME (AND ADDRESS IF DIFFERENT FROM BORROWER 1)TRUTH IN LENDING DISCLOSURE 'e' means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGE Amount Financed Total of Payments Total Sale PriceThe cost of your credit as a yearly rate. The dollar amount the The amount of credit The amount you will have The total cost of your purchase on credit iscredit will cost you. provided to you or on paid after you have madeyour behalf.all payments as scheduled.$1 8.00 %$ 6,592.89 9 $ 25,000.00 3 $ 31,692.89 4which includes yourdownpayment of $ .INTEREST RATE AND PAYMENT SUMMARYPrepayment: If you pay off early you will not have topay a penalty.Rate & Monthly Payment Required Deposit: The Annual Percentage Rate doesnot take into account your required deposit, if any.Interest Rate8.0 % 5Principal + Interest Payment$ 440.196Property Insurance: You may obtain propertyinsurance from anyone you want that is acceptable tothe Credit Union. If you get the insurance from us,Est. Taxes + Insurance (Escrow)you will pay $(Includes Private Mortgage Insurance)$ 07Assumption: Someone buying your dwelling cannotTotal Est. Monthly Payment$ 440.198 assume the remainder of the loan on theterms.originalThere is no guarantee that you will be able to refinance to lower your Filing FeesNon-Filing Insurancerate and payments.$$Balloon Payment (Check if applicable) Final Balloon Payment due $Late Charge: 20% of interest due if 7 or more days late, minimum of $5.00, maximum of $20.00. 9Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in yourshares and dividends and, if any, your deposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/Make Year I.D. Number Type ValueKey Number$Mobile Home 2009 321098A $ 30,000.00$Other (Describe)10Pledge of Shares $in Account No.$ in Account No.See your contract documents for any additional information about nonpayment, default, and any required repayment in full before thescheduled date.11 SIGNATURESBy signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property isdescribed in the "Security" section of the Truth in Lending Disclosure, you also agree to the terms of the SecurityAgreement. If you sign, or otherwise authenticate, as "Owner of Property" you agree only to the terms of the SecurityAgreement.CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.Borrower 1 SignatureX(Seal)DateBorrower 2 SignatureX(Seal)DateSignatureX(Seal)DateSignatureX(Seal)DateOther Borrower Owner of Property WitnessOther Borrower Owner of Property WitnessCUNA Mutual Group 2011 All Rights ReservedNXX042-eClosed-End Consumer Lending User Guide 90

Explanation of Sample 6 – Page 11. Annual Percentage Rate – In this example, the APR and the contract Interest rate are thesame, because the fees for the credit report and appraisal are not considered prepaid financecharges when purchasing a mobile home as the borrower’s primary residence.2. Finance Charge – This is the dollar amount of a contract rate of 8.00% on $25,000.00 for 72months.3. Amount Financed – The amount will be $25,000.00.4. Total of Payments – The amount of payments times the number of payments equals the total ofpayments. The cost of credit insurance would be included in the total of payments, if Joan hadelected insurance.5. Interest Rate – The contractual interest rate is 8.00%.6. Principal & Interest Payment – This is the monthly principal and interest figure equal to$440.19.7. Estimated Taxes and Insurance (Escrow) including Private Mortgage Insurance – This isthe monthly escrow amount for taxes, insurance and private mortgage insurance if escrow isrequired.8. Total Estimate Monthly Payment – The Total estimated monthly payment is $440.19 since anescrow payment is not required.9. Late Charge – For this example, the late charge is 20% of interest due if seven or more dayslate with a minimum of $5.00 and maximum of $20.00. If your credit union charges a late charge,it must be disclosed.10. Security – For this example, the property offered is the mobile home. A full description of thecollateral should be shown in the “Security” section of the Truth in Lending Disclosure.11. Signature – Joan Member signs as the borrower.Closed-End Consumer Lending User Guide 91

Sample 6 – Page 2Credit Union Loan No. Acct. No.Borrower(s)12 ITEMIZATION OF THE AMOUNT FINANCEDItemization of Amount Financed of Amount Given to You Directly Amount Paid on Your Account Prepaid Finance Charge$ 25,000.00 a $ 25,000.00 b $ N/A c $ N/A dAmounts Paid to Others on Your Behalf: (If an amount is marked with an asterisk (*) we will be retaining a portion of the amount.)$ To $To$Toe$To$ To$To$To$To$ To$To$To$To$ To$ToLOAN AGREEMENTIn this Loan Agreement ("Agreement") all references to "Credit Union," "we," "our," or "us," mean the Credit Union whose nameappears above and anyone to whom the Credit Union assigns or transfers this Agreement. All references to "you" or "your" mean eachperson who signs, or otherwise authenticates, this Agreement as a borrower.13 1. PROMISE TO PAY - You promise to pay $ to the Credit Union plus interest on the unpaid balance until what you owehas been repaid. The interest rate is % per year. You will pay principal and interest by making payments each month. Yourinitial monthly payment will be in the amount of U.S. $ . You will make payments on the day of each monthbeginning on. You will make these payments every month until you have paid all of the principal and interest and any othercharges, described below, that you may owe under this Note. If, on, you still owe amounts under this Note, you will payall amounts in full on that date.14 Collection Costs:2. PAYMENTS - If you elect voluntary payment protection, we willinclude the premium or program fee in your payments. If yousubsequently elect voluntary payment protection, we will eitherinclude the premium or program fee in your payments or extendthe term of your loan. If the term is extended, you will be requiredto make additional payments of the scheduled amount, until whatyou owe has been paid. You may prepay any amount withoutpenalty. If you prepay any part of what you owe, you are stillrequired to make the regularly scheduled payments, unless wehave agreed to a change in the due date. Because this is a simpleinterest loan, if you do not make payments exactly on the duedate, your final payment may be more or less than the amount ofthe final payment that is disclosed. You promise to make allpayments to the place we choose. If this loan refinances anotherloan we have with you, the other loan will be canceled andrefinanced as of the date of this loan. Unless otherwise requiredby law, payments will be applied to amounts owed in the mannerwe choose.3. LOAN PROCEEDS BY MAIL - If the proceeds of this loan aremailed to you, interest on this loan begins on the date the loanproceeds are mailed to you.4. SECURITY FOR LOAN - This Agreement is secured by allproperty described in the "Security" section of the Truth in LendingDisclosure. Property securing other loans you have with us alsosecures this loan, unless the property is a dwelling. In addition toyour pledge of shares, we may also have what is known as astatutory lien on all individual and joint accounts you have with us.A statutory lien means we have the right under federal law andmany state laws to claim an interest in your accounts. We canenforce a statutory lien against your shares and dividends, and ifany, interest and deposits, in all individual and joint accounts youhave with us to satisfy any outstanding financial obligation that isdue and payable to us. We may exercise our right to enforce thislien without further notice to you, to the extent permitted by law.For all borrowers: You pledge as security for this loan all sharesand dividends and, if any, all deposits and interest in all joint andindividual accounts you have with the Credit Union now and in thefuture. The statutory lien and/or your pledge will allow us to applythe funds in your account(s) to what you owe when you are indefault. The statutory lien and your pledge do not apply to anyIndividual Retirement Account or any other account that wouldlose special tax treatment under state or federal law if given assecurity.5. DEFAULT - You will be in default under this Agreement if youdo not make a payment of the amount required on or before thedate it is due. You will be in default if you break any promise youmade in connection with this loan or if anyone is in default under 14. OTHER PROVISIONS -any security agreement made in connection with this Agreement.You will be in default if you die, file for bankruptcy, becomeinsolvent (that is, unable to pay your bills and loans as theybecome due), or if you made any false or misleading statements inyour loan application. You will also be in default if somethinghappens that we believe may seriously affect your ability to repaywhat you owe under this Agreement or if you are in default underany other loan agreement you have with us.6. ACTIONS AFTER DEFAULT - When you are in default, we maydemand immediate payment of the entire unpaid balance under thisAgreement. You waive any right you have to receive demand forpayment, notice of intent to demand immediate payment and noticeof demand for immediate payment. If we demand immediatepayment, you will continue to pay interest at the rate provided for inthis Agreement, until what you owe has been repaid. We will alsoapply against what you owe any shares and/or deposits given assecurity under this Agreement. We may also exercise any otherrights given by law when you are in default.7. EACH PERSON RESPONSIBLE - Each person who signs, orotherwise authenticates, this Agreement will be individually andjointly responsible for paying the entire amount owed under thisAgreement. This means we can enforce our rights against any oneof you individually or against all of you together.8. LATE CHARGE - If you are late in making a payment, youpromise to pay the late charge shown in the Truth in LendingDisclosure. If no late charge is shown, you will not be charged one.9. DELAY IN ENFORCING RIGHTS - We can delay enforcing any ofour rights under this Agreement any number of times without losingthe ability to exercise our rights later. We can enforce thisAgreement against your heirs or legal representatives.10. CONTINUED EFFECTIVENESS - If any part of this Agreement isdetermined by a court to be unenforceable, the rest will remain ineffect.11. NOTICES - Notices will be sent to you at the most recentaddress you have given us in writing. Notice to any one of you willbe notice to all.12. USE OF ACCOUNT - You promise to use your account forconsumer (personal, family or household) purposes, unless theCredit Union gives you written permission to use the account alsofor agricultural or commercial purposes, or to purchase real estate.13. NO ORAL AGREEMENTS -- THIS NOTE CONSTITUTES A"WRITTEN LOAN AGREEMENT" PURSUANT TO SECTION 26.02OF THE TEXAS BUSINESS AND COMMERCE CODE, IF SUCHSECTION APPLIES. THIS WRITTEN LOAN AGREEMENTREPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIESAND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OFTHE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTSBETWEEN THE PARTIES.NXX042-eClosed-End Consumer Lending User Guide 92

Explanation of Sample 6 – Page 212. Itemization of Amount Financed –a) “Itemization of Amount Financed” is the amount financed figure of $25,000.00.b) “Amount Given to You Directly” is the amount disbursed to the borrower equal to $25,000.00for a mobile home.c) “Amount Paid on Your Account” is not applicable since your borrower is not paying off anyexisting loan balance with the credit union and should be marked ”N/A”.d) “Prepaid Finance Charge” is not applicable. The credit report fee and appraisal fee are notfinance charges when the purpose of the loan is to purchase a mobile home to be used asthe borrower’s principal dwelling.e) “Amount Paid to Others on Your Behalf” is not applicable.13. Promise to Pay – For this example, the monthly payment of $440.19, the first payment date ofJuly 1, 2010, maturity date 6/1/2016, and the interest rate of 8.00% are inserted.14. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are disclosed here.Closed-End Consumer Lending User Guide 93

Sample 7 – Total Sales PriceLoan Scenario:Finance the sale of a repossessed car to Jose and Maria Member.Details:On June 1, 2013 Jose and Maria Member submit a sealed bid of $13,000.00 to purchase a 2011Ford Minivan. ID No. 3210000.This vehicle had been repossessed by the credit union. They will give this property as security for theloan. The property is valued at $15,000.00. They will make a $1000.00 downpayment.There is a loan processing fee (prepaid finance charge) of $100.00 that Jose and Maria are payingfor in cash.Jose and Maria want single credit disability and joint credit life insurance.Your credit union does not offer property insurance; however, they required Jose and Maria to obtainsuch insurance.The first payment is July 1, 2013. The interest rate is 8.00%. The loan is to be repaid in five years.Closed-End Consumer Lending User Guide 94

Sample 7SAMPLE 7Thank You For Borrowing At Your Credit UnionLOAN AND SECURITY AGREEMENTSAND DISCLOSURE STATEMENTFixed Rate Variable Rate Loan Date Loan NumberAccount Number1X 6-1-20137101 46071Borrower 1 Name and Address Borrower 2 Name (and address if different from Borrower 1)Jose Member1234 Main StreetAnytown, USA 12345Maria MemberTRUTH IN LENDING DISCLOSURE ‘e’ means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGEAmount FinancedThe amount of credit provided to youTotal of PaymentsThe amount you will have paid after youTotal Sale PriceThe total cost of your purchase on credit isThe cost of your credit as a yearly rate. The dollar amount the credit will cost you.or on your behalf.have made all payments as scheduled.28.3562 % $ 2,767.39 3 $ 11,900.00 4 $ 15,774.54 5 $ 15,767.39Filing FeesNon-Filing Insurancewhich includes your downpayment of$ N/A 7 $ N/A 8$ 1,000.00 6Variable Rate: N/A9Prepayment: If you pay off early you will not have to pay a penalty. Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any.Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union. If you get the insurance from us, you will pay$ N/A 10Late Charge: 11 20% of interest due if 7 or more days late, minimum of $5.00, maximum of $20.00.Your Payment Number of Payments Amount of Payments When Payments Are DueSchedule will be:59 12 $262.91 13 Monthly Beginning 14 7/1/20131$262.856/1/2018Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in your shares and dividends and, if any, yourdeposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/MakeYear I.D. Number Type/Lien Amount Value Key NumberAuto – Ford Minivan 2011 3210000 4-door $15,000.00 08489915Other (Describe):Pledge of Shares $ in Account Number $ in Account NumberSEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to Directly Amount Paid on Your Account Prepaid Finance ChargeYou16 $ 11,900.00 a $ 12,000.00 b $ N/A c $ 100.00 dAmount Paid to Otherson Your Behalf$ N/AeTo$ N/ATo$ N/ATo IF AN AMOUNT IS MARKED WITH AN $ ASTERISK N/A ( *), WE WILL BE To RETAINING A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse side17 X CONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE18 1. Promise to Pay: You promise to pay $ 12,000.00 to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rateloans the interest rate is 8.00 % per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is N/A % per year. 2. These Agreements are governed by the laws of ____________________________________________.Kansas 193. Collection Costs:20XOTHER BORROWEROWNER OF PROPERTYSIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.21 X Jose Member6-1-2013(SEAL)X Maria Member6-1-2013(SEAL)BORROWER 1DATEBORROWER 2DATE(SEAL)WITNESSDATE“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willreceive written notice before any increase goes into effect. You have theright to stop this insurance by notifying your credit union in writing. Yoursignature below means you agree that:• If you elect insurance, you authorize the credit union to add the chargesfor insurance to your loan each month.XOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644DATE• You are eligible for disability insurance only if you are working for wagesor profit for 25 hours a week or more on the date of any advance. If youare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.• You are eligible for insurance up to the Maximum Age for Insurance.Insurance will stop when you reach that age.NOTE: THE LIFE AND DISABILITY INSURANCE CONTAINS CERTAIN BENEFITEXCLUSIONS, INCLUDING A PRE-EXISTING CONDITION EXCLUSION.PLEASE REFER TO YOUR CERTIFICATE FOR DETAILS.22 YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULE COVERED MEMBER (Please Print)SINGLE CREDIT DISABILITY$ 679.44 e Jose MemberXSINGLE CREDIT LIFEJOINT CREDIT LIFEXX$ e$ 427.71 eJose Member and Maria MemberIf you are totally disabled for more than 30 days, then the disability benefit will begin with the 31st day of disability.GROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOAN INSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFITDISABILITY$ 600LIFEN/AXXX-XXXX-XDATE OF ISSUE OF THIS CERTIFICATEMAX. INSURABLE BALANCE PER LOAN ACCOUNTMAX. AGE FOR INSURANCE$30,00066$30,00070MEMBER’S DATE OF BIRTH4-23-59XJOINT INSURED’S DATE OF BIRTHSECONDARY BENEFICIARY (If you desire to name one)Jose Member 6/1/2013 X Maria Member 6/1/2013SIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATEAPP. 825-0786(Only required if JOINT CREDIT LIFE coverage is selected)© CUNA Mutual Group 2000, 04-06, 08, 11, 12 All Rights Reserved CREDIT UNION COPY NXX01BClosed-End Consumer Lending User Guide 95

Explanation of Sample 71. Fixed/Variable Rate – In this example, the interest rate is fixed so the “Fixed Rate” box ischecked.2. Annual Percentage Rate – In this example, the APR and the contract Interest rate are different.This is because your credit union charges a prepaid finance charge. A prepaid finance charge isincluded in the APR whether it is financed or paid in cash.3. Finance Charge – This is the dollar amount of a contract rate of 8.00% on $12,000.00 for 60months.4. Amount Financed – The amount will be $11,900.00. It includes $12,000.00 to pay for the vanminus the $100.00 loan processing fee which is a prepaid finance charge.5. Total of Payments – The amount of payments times the number of payments equals the total ofpayments. The cost of credit insurance would be included in the total of payments.6. Total Sale Price – The total sale price must be entered here. It is determined by adding thefollowing together :• Cash Price $13,000.00• Any other amounts financed $13,000.00(but not finance charge)• Finance Charge (Needs to be Computed) $ 2,767.39• Total $15,767.39The downpayment also needs to be disclosed in this scenario. There was a downpayment of$1,000.00.Closed-End Consumer Lending User Guide 96

Sample 8 – Motorcycle Purchase, Financed Prepaid Finance ChargeLoan Scenario:Purchase a motorcycle, pay off some existing revolving credit balances. A car is given as collateralfor the loan. This loan includes a prepaid finance charge that is being financed.Details:On June 1, 2013 John Q. Member requests a loan for $10,500.00 to purchase a motorcycle and hewould like your credit union to payoff $200.00 to JSC Co. and $200.00 to Smith Company.He is offering a 2011 Ford Taurus for security, with a value of $20,000.00 – ID No. 4321098A.There is a prepaid finance charge of $100.00 which John is financing.John does not want either credit disability or credit life insurance.Your credit union does not offer property insurance; however, they require John to obtain suchinsurance.The first payment is due July 1, 2013. The interest rate is 8.00%. The loan is to be repaid in fiveyears.Closed-End Consumer Lending User Guide 97

Sample 8SAMPLE 8Thank You For Borrowing At Your Credit UnionLOAN AND SECURITY AGREEMENTSAND DISCLOSURE STATEMENTFixed Rate Variable Rate Loan Date Loan NumberAccount Number1X 6-1-20136791 1234-1Borrower 1 Name and Address Borrower 2 Name (and address if different from Borrower 1)John Q. Member1234 Main StreetAnytown, USA 12345TRUTH IN LENDING DISCLOSURE ‘e’ means an estimateANNUAL PERCENTAGE RATE FINANCE CHARGEAmount FinancedThe amount of credit provided to youTotal of PaymentsThe amount you will have paid after youTotal Sale PriceThe total cost of your purchase on credit isThe cost of your credit as a yearly rate. The dollar amount the credit will cost you.or on your behalf.have made all payments as scheduled.28.4145 % $ 2,376.53 3 $ 10,400.00 4 $ 12,776.53 5 $Filing FeesNon-Filing Insurancewhich includes your downpayment of$ N/A 6 $ N/A 7$Variable Rate: N/A8Prepayment: If you pay off early you will not have to pay a penalty. Required Deposit: The Annual Percentage Rate does not take into account your required deposit, if any.Property Insurance: You may obtain property insurance from anyone you want that is acceptable to the Credit Union. If you get the insurance from us, you will pay$ N/A 9Late Charge: 10 20% of interest due if 7 or more days late, minimum of $5.00, maximum of $20.00.Your Payment Number of Payments Amount of Payments When Payments Are DueSchedule will be:59 11 $212.95 12 Monthly Beginning 13 7/1/20131$212.486/1/2018Security: Collateral securing other loans with the Credit Union may also secure this loan. You are giving a security interest in your shares and dividends and, if any, yourdeposits and interest in the Credit Union; and the property described below:CollateralProperty/Model/MakeYear I.D. Number Type/Lien Amount Value Key NumberAuto – Ford Taurus 2011 321098A 4-door $20,000.00 317771914Other (Describe):Pledge of Shares $ in Account Number $ in Account NumberSEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.ITEMIZATION OF THE AMOUNT FINANCED IF AN AMOUNT IS MARKED WITH AN ASTERISK ( *), WE WILL BE RETAINING A PORTION OF THE AMOUNT.Itemization of Amount Financed of Amount Given to Directly Amount Paid on Your Account Prepaid Finance ChargeYou15 $ 10,400.00 a $ 10,000.00 b $ N/A c $ 100.00 dAmount Paid to Others $ 200.00To$Toon Your BehalfeJSC Co.N/A$ 200.00To Smith Company IF AN AMOUNT IS MARKED WITH AN $ ASTERISK N/A ( *), WE WILL BE To RETAINING A PORTION OF THE AMOUNT.LOAN AGREEMENT continued on reverse sideCONSUMERS’ CLAIMS AND DEFENSES NOTICE — IF CHECKED, SEE REVERSE SIDE FOR NOTICE16 1. Promise to Pay: You promise to pay $ 10,500.00 to the Credit Union plus interest on the unpaid balance until what you owe has been repaid. For fixed rateloans the interest rate is 8.00 % per year. For variable rate loans, the interest rate will vary in accordance with the terms of the variable rate explained in the Truthin Lending Disclosure. The initial interest rate is N/A % per year. 2. These Agreements are governed by the laws of ____________________________________________.Kansas 173. Collection Costs:18SIGNATURES FOR LOAN AND SECURITY AGREEMENTSVERMONT NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IFTHE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.NOTICE TO UTAH BORROWERS: This written agreement is a final expression of the agreement between you and the Credit Union. This written agreement may not becontradicted by evidence of any oral agreement.By signing, or otherwise authenticating, as Borrower, you agree to the terms of the Loan Agreement. If property is described in the “Security” section of the Truth in LendingDisclosure, you also agree to the terms of the Security Agreement on the reverse side. If you sign, or otherwise authenticate, as “Owner of Property” you agree only to theterms of the Security Agreement. CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT BEFORE YOU SIGN IT.19 X John Q. Member(SEAL)6-1-2013 X(SEAL)BORROWER 1DATEBORROWER 2DATEXOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSDATE“You’’ or “Your’’ means the member and the joint insured (if applicable).Credit insurance is voluntary and not required in order to obtain this loan.You may select any insurer of your choice. You can get this insurance onlyif you check the “yes’’ box below and sign your name and write in the date.The rate you are charged for the insurance is subject to change. You willreceive written notice before any increase goes into effect. You have theright to stop this insurance by notifying your credit union in writing. Yoursignature below means you agree that:• If you elect insurance, you authorize the credit union to add the chargesfor insurance to your loan each month.XOTHER BORROWEROWNER OF PROPERTY(SEAL)WITNESSCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CMFG Life Insurance Company • Madison, WI 53701-0391 • Phone: 800.356.2644DATE• You are eligible for disability insurance only if you are working for wagesor profit for 25 hours a week or more on the date of any advance. If youare not, that particular advance will not be insured until you return towork. If you are off work because of temporary layoff, strike or vacation,but soon to resume, you will be considered at work.• You are eligible for insurance up to the Maximum Age for Insurance.Insurance will stop when you reach that age.NOTE: THE LIFE AND DISABILITY INSURANCE CONTAINS CERTAIN BENEFITEXCLUSIONS, INCLUDING A PRE-EXISTING CONDITION EXCLUSION.PLEASE REFER TO YOUR CERTIFICATE FOR DETAILS.20 YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULE COVERED MEMBER (Please Print)SINGLE CREDIT DISABILITY$ eXSINGLE CREDIT LIFEJOINT CREDIT LIFEXX$ e$ eIf you are totally disabled for more than 30 days, then the disability benefit will begin with the 31st day of disability.GROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOAN INSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFITDISABILITY$ 600LIFEN/AXXX-XXXX-XDATE OF ISSUE OF THIS CERTIFICATEMAX. INSURABLE BALANCE PER LOAN ACCOUNTMAX. AGE FOR INSURANCE$30,00066$30,00070MEMBER’S DATE OF BIRTH4-23-59XJOINT INSURED’S DATE OF BIRTHJohn Q. Member 6/1/2013SECONDARY BENEFICIARY (If you desire to name one)SIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATEAPP. 825-0786(Only required if JOINT CREDIT LIFE coverage is selected)X© CUNA Mutual Group 2000, 04-06, 08, 11, 12 All Rights Reserved CREDIT UNION COPY NXX01BClosed-End Consumer Lending User Guide 98

Explanation of Sample 81. Fixed/Variable Rate – In this example, the interest rate is fixed, so the “Fixed Rate” box ischecked.2. Annual Percentage Rate – In this example, the APR and the contract Interest rate are different.This is because your credit union charges a prepaid finance charge. A prepaid finance chargeaffects the calculation of the APR, whether it is financed or paid in cash.3. Finance Charge – This is the dollar amount of a contract rate of 8.00% on $10,500.00 for 60months, plus the amount of any prepaid finance charge.4. Amount Financed – The amount financed is the loan amount less any prepaid finance charge.The amount financed will be $10,400.00. To obtain this amount, add together $10,000.00 for themotorcycle loan, $200.00 to JSC Co., $200.00 to Smith Company and $100.00 for the financedprepaid finance charge. Then subtract $100.00 for the prepaid finance charge from this total toobtain the amount financed.5. Total of Payments – The amount of payments times the number of payments equals the total ofpayments. The cost of credit insurance would be included in the total of payments, if John hadelected insurance.6. Filing Fee – In this example, there is no filing fee. If your credit union passes the cost of a filingfee onto your borrowers, the amount must be disclosed in this section, whether paid in cash orfinanced.7. Non-Filing Insurance – In this example, the credit union does not have non-filing insurance.A credit union cannot charge a borrower more for non-filing insurance than it would cost foractually filing, unless the additional cost is added to the finance charge.8. Variable Rate – This example is for a fixed rate loan. The “Variable Rate” section is notapplicable and should be marked ”N/A”.9. Property Insurance – If your credit union requires a borrower to obtain this insurance, the costmust only be disclosed if the borrower purchases the insurance through your credit union at thetime the loan is disbursed. If your credit union doesn’t offer insurance, then use ”N/A”.10. Late Charge – For this example, the late charge is 20.00% of interest due if seven (7) or moredays late with a minimum of $5.00 and maximum of $20.00. If your credit union charges a latecharge, it must be disclosed.11. Number of Payments – For this example, the number of payments required to repay the loanis 60.12. Amount of Payments – The cost of the payment doesn’t include any insurance.13. When Payments are Due – State the frequency (monthly, bi-weekly, etc.) of payments as wellas due date of first payment and last payment.14. Security – For this example, the collateral is a car which John already owns. A full description ofthe collateral should be shown in the “Security” section of the Truth in Lending Disclosure.Closed-End Consumer Lending User Guide 99

Explanation of Sample 8 (continued)15. Itemization of Amount Financed – Notice that the dollar amounts do not add up when there isa prepaid finance charge.a) “Itemization of Amount Financed” is the amount financed figure of $10,400.00.b) “Amount Given to You Directly” is the amount disbursed to the borrower equal to $10,000.00for a motorcycle.c) “Amount Paid on Your Account” is not applicable since your borrower is not paying off anyexisting loan balance with the credit union and should bemarked ”N/A”.d) “Prepaid Finance Charge” is $100.00, that John is financing.e) “Amount Paid to Others on Your Behalf” is $200.00 paid to JSC Co. and $200.00 paid toSmith Company.16. Promise to Pay – For this example, the loan proceeds of $10,500.00 and the interest rate of8.00% are inserted.17. Governing Law – For this example, the credit union has chosen to enter the state that appliesfor the governing law provision. This is an optional field.18. Collection Costs – Any collection costs your credit union wants to impose that are permissibleunder state law are disclosed here.19. Signature – John Member signs as the borrower.20. Credit Insurance Enrollment – The borrower must check the appropriate box(es) under the“Election of Insurance” section. For this example, John has chosen neither credit disabilityor credit life – X’s have been made in the “No” box under Credit Disability and Credit Life.Make sure the borrower signs the credit insurance enrollment document, whether they electedinsurance or not.Closed-End Consumer Lending User Guide 100