Under the policies of its board, each institution shall adopt written standards for prudent lending and shall issue written policies, operating procedures, and control mechanisms that reflect prudent credit practices and comply with all applicable laws and regulations. Written policies and procedures shall, at a minimum, prescribe:

The minimum supporting credit and financial information, frequency for collection of information, and verification of information required in relation to loan size, complexity and risk exposure

The procedures to be followed in credit analysis

The minimum standards for loan disbursement, servicing and collections

Requirements for collateral and methods for its administration

Loan approval delegations and requirements for reporting to the board

Loan pricing practices

Loan underwriting standards that include measurable standards:

For determining that an applicant has the operational, financial, and management resources necessary to repay the debt from cashflow

That are appropriate for each loan program and the institution's risk-bearing ability; and

That consider the nature and type of credit risk, amount of the loan, and enterprises being financed

Requirements that loan terms and conditions are appropriate for the loan; and

Such other requirements as are necessary for the professional conduct of a lending organization, including documentation for each loan transaction of compliance with the loan underwriting standards or the compensating factors or extenuating circumstances that establish repayment of the loan notwithstanding the failure to meet any one or more loan underwriting standard.