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Installment Lending: Post Payday

Installment Lending: Post Payday. PDLBA November 14, 2006. Trent Sorbe tsorbe@firstcommunity.biz (605)696-1739. Bank Installment Lending: Post Payday Lending. First Bank of Delaware Similar to AFP Currently restructuring First Bank & Trust (fka Community SB) First Bank & Trust .

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Installment Lending: Post Payday

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  1. Installment Lending: Post Payday PDLBA November 14, 2006 Trent Sorbe tsorbe@firstcommunity.biz (605)696-1739

  2. Bank Installment Lending:Post Payday Lending • First Bank of Delaware • Similar to AFP • Currently restructuring • First Bank & Trust (fka Community SB) • First Bank & Trust

  3. Regulators Approach to Use of Third Parties and Outsourcing • Expectations continue to increase • Bank responsible to regulators and customers for activities of third parties • Reputation of partner and risk to bank’s reputation • “Managing it like its your own” • Full time vendor management and oversight process

  4. Feb. 17, 2006: Lessons Learned

  5. Bank-Model Loan Origination Process Website Loan Application Approve E-mail or Discuss Approval & Loan Terms Borrower Sends to Company Voided Check and Verification of Employment (and Income if applicable) Automated Loan Underwriting Decline Loan Agent Takes Application Direct Call Loan Application Ends Documentation is Manually Approved by Underwriting Dept. Documents Reviewed by Funding Dept. and Loan Funded by Bank Marketer/Bank Calls Employer to Verify Loan Documents E-mailed to Borrower Borrower Signs Loan Documents Electronically Yellow = Marketer functions Blue = Bank functions White = System or Borrower Functions

  6. Another Option: Lines of Credit Advantages: • Less paperwork • Uniform upfront TILA disclosures • No signatures • New advances easy and fast – no documentation Disadvantages: • Periodic statements

  7. Revel Advance Terms • Offered in conjunction with the Revel Prepaid MasterCard • Line of credit up to $1,000 ($200 initially) • Credit limit – Established based on direct deposit activity to the card and verified net income • Risk-Based Pricing • Monthly maintenance fee (when there is a balance outstanding) ranging from $4.95 - $9.95 • Cash advance fee ranging from 8% - 12% • Minimum payment 20% of credit limit • Abuse Prevention • Ensures fixed payment amount for customer • Repayment automatically from the Revel Card and tied to date direct deposits are historically made

  8. Revel Advance: Other Features • Loan repayment performance will be reported to the credit reporting agencies • Revel card fees are in line with Wells Fargo’s Direct Deposit Advance fee structure – a program touted as a viable short term credit alternative by the CFA and CRL

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