Regulatory Alerts1992-08-03
Added · Updated
Guideline 5.1.1: Motor Vehicle Financing
The Office of the Commissioner of Banking issued this guideline to strengthen lending practices in motor vehicle financing following examinations that revealed excessive reliance on formula lending and inadequate credit assessments. The regulator requires authorized institutions to evaluate borrower creditworthiness based on income stability and net worth rather than solely on vehicle market value, while ensuring direct officer involvement or strict dealer compliance standards. Institutions must also establish comprehensive credit files containing specific borrower and collateral data and implement regular systemic reviews of outstanding loan facilities.
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