FAIR LENDING POLICY

Premco Financial Corporation (Premco) is committed to providing financial services to applicants and borrowers on an equal basis. Premco does not discriminate in the granting, withholding, extending, renewing of credit or in the fixing of interest rates, terms or conditions of any form of credit on the basis of race, color, religion, national origin, sexual orientation, military status, age(provided the applicant has legal capacity to enter into a binding contract), sex, marital status, disability or familial status. It is Premco’s policy to treat all of its applicants and borrowers consistently and in compliance with fair lending laws, throughout the loan process.

Premco compliance with this is straight forward. For consumer loans, Premco does not have a credit application and approves loans for every consumer provided:
• the down payment meets Premco’s requirements (the down payments are the same for every consumer); however, the down payments will vary based on type of insurance premium financed.
• the insurance company being financed is approved by Premco.
• the insurance agent has been appointed by Premco.
• Premco does not specifically base interest rate on consumer credit worthiness, but on risk parameters that consider the insurance agency originating the loan and the insurance policy type.

Premco’s employees offer assistance and services in a fair and consistent manner during the performance of their jobs to all potential applicants and borrowers without regard to race, color, religion, national origin, sexual orientation, military status, age(provided the applicant has legal capacity to enter into a binding contract), sex, marital status, disability, familial status, receipt of public assistance, or the exercise of legal rights under the federal Consumer Credit Protection Act (15 U.S.C. §§ 1601). Premco is committed to implementing policies that ensure compliance with all fair lending laws, including New York Executive Law § 296‐a.

FAIR LENDING OVERVIEW

The legal aspects of fair lending are contained in several federal and state laws. The purpose of these laws is to ensure that fair and equal treatment is provided to individuals seeking financing.

The Federal Equal Credit Opportunity Act (ECOA) (15 U.S.C. §§ 1691 et seq.) and its implementing regulation, Regulation B (12 C.F.R. Part 202), prohibit discrimination in any aspect of a credit transaction. The prohibited bases of discrimination under the ECOA are the following: race; religion; national origin; sex; marital status; age (provided that the applicant has the capacity to enter a binding contract); the applicant’s receipt of income through a public assistance program; and the good faith exercise of the applicant of a right under the federal Consumer Credit Protection Act (15 U.S.C. §§ 1601 et seq.).

Various state laws also govern fair lending, including New York Executive Law § 296‐a, which makes it an unlawful discriminatory practice for any creditor to discriminate on the basis of race, creed, color, national origin, age, sex, marital status, disability, sexual orientation, or military status; to use any form of application for credit or use or make any record or inquiry which expresses, directly or indirectly, any limitation, specification, or discrimination as to a prohibited basis; to make any inquiry of an applicant concerning his or her capacity to reproduce, or his or her use or advocacy of any form of birth control or family planning; to refuse to consider sources of an applicant’s income or to subject an applicant’s income to discounting, in whole or in part, because of a prohibited basis or childbearing potential; or to discriminate against a married person because such person neither uses nor is known by the surname of his or her spouse.

LOAN PROCESS

Premco is aware that the risk of unfair lending practices runs throughout the loan process. Premco is committed to implementing training and policies that protect against discriminatory practices at every level of the loan process, from application to loan satisfaction, and to taking immediate corrective action should fair lending discrimination occur. If fair lending deficiencies are observed or appear in an employee’s job evaluation, the employee will receive additional training or counseling in an effort to correct the deficiency. If the deficiency persists, the employee will be subject to more severe action, including termination.

UNDERWRITING AND PRICING

Underwriting guidelines are established through written policy and procedures in order to promote and ensure consistency throughout all applicants. The guidelines address all aspects of the underwriting process, including collateral standards, credit, and other factors relevant to the underwriting decision. Consumer income, source of funds, debt ratios, and income documentation are not a consideration for our consumer loan applicants. Loan applications that are rejected by Premco are referred to management for a second review prior to a denial of credit.

LOAN SERVICING AND COLLECTION

This plan’s principles of fair lending policy apply throughout the loan process, and Premco is committed to implementing policies, procedures, employee training, and management oversight to ensure equitable treatment of all debtors. Premco’s policies include responding to consumer inquiries, concerns, and complaints in a timely, fair, and consistent manner.

THIRD PARTY ORIGINATIONS

Premco’s commitment to complying with fair lending laws extends to its relationships with third party originators (i.e., insurance agencies and brokers). Premco requires third party originators doing business with Premco to comply with all applicable law, including all applicable federal and state fair lending laws. Premco’s Fair Fending Policy is disseminated to Third Parties who are approved to originate finance agreements on behalf of Premco. Premco will also post a copy of this Policy on its web site. Third party originators will be notified of any fair lending deficiencies noted in the monitoring of their loan packages. They will be responsible for correcting any deficiencies. If deficiencies are not corrected, Premco will take appropriate corrective action.

TRAINING

The Compliance Department conducts training for all new and current employees. All new employees will receive a copy of this Policy during that training. Training for new employees includes correctly and adequately describing prohibited bases under the Equal Credit Opportunity Act, Regulation B, and applicable state laws.

COMPLIANCE

Premco’s commitment to fair lending is reflected in its belief in the shared responsibility for compliance with fair lending laws at every level of the organization. The Board of Directors is responsible for approving, adopting, and implementing the Fair Lending Policy. Premco’s Management is responsible for ensuring that its business practices comply with its Fair Lending Policy in the following ways: (i) communicating Premco’s fair lending policies to the applicable business unit management; (ii) allocating, on an ongoing basis, sufficient resources to ensure the successful implementation of this Policy; (iii) obtaining input and guidance from the Compliance Department on significant business decisions that have potential fair lending impact; and (iv) monitoring results and recommending corrective action where necessary. The Compliance Department, led by the Corporate Compliance Manager (CCM), implements the policies outlined in this Policy in the following ways: (i) monitoring implementation of and adherence to the fair lending policies and procedures; (ii) reviewing and addressing fair lending complaints; (iii) monitoring, as appropriate, Premco’s loan application and underwriting process as well as its pricing policies; (iv) reviewing, on a regular basis, the Fair Lending Policy to determine that it still accurately reflects the procedures followed by Premco and conforms to federal and state law; (v) maintaining training materials to keep current with changes in the law, regulation, and judicial interpretation; and (vi) providing, at least annually, updates on fair lending issues to all Premco employees involved in the loan origination or servicing process.

APPROVED 7/22/15