Answer:
Answer by Jim Bedsole: Are the other customers you waive the fee for considered "similarly situated" financial as your chairman? The burden will be on you to prove you did not give preferential treatment. Be sure you can document this. You may also consider if you have an employee program that waives the 1% origination fee for all employees of the bank. If so, the Chairman would be eligible to participate in that program and get the fee waived through that.
Answer:
Answer by Dan Persfull: If you have to waive your Chairman's processing fee in order to compete for the loan then maybe it's time to elect a new Chairman. As Jim indicates, you are going to have to be able to fully document the fee was waived under similar circumstances for other loan customers. The key is that you have waived the fees, not that you would waive them. I think you may have a difficult time documenting the fee was waived as a competitive edge vs waiving the fee because he's the Chairman.
First published on BankersOnline.com 10/15/07
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