UC Santa Barbara Policy 5825
Policies
Issuing Unit: Administrative Services Date: June 1, 1986
UNDER REVISION
CONTACT PERSONNEL
EMPLOYEE EMERGENCY LOAN FUND
I. REFERENCES:
A. President Hitch's letter to Chancellors, dated October 21,
1970, establishing guidelines for the Emergency Loan Fund.
B. University of California Accounting Manual, Section E-526-48.
C. Assistant Counsel Marchand's memorandum to Assistant Business
Manager McClure, dated February 3, 1971.
II. POLICY:
The Employee Emergency Loan Fund provides loans to UCSB employees
who (1) have an immediate need for funds as the result of an
unforeseen emergency, (2) have no other source of money available
within the time necessary to act, and (3) cannot obtain a loan from
a credit union or comparable lending institutions. Loans will
normally not be made in order to supplement a deficit caused by
large but predictable bills. This would include income tax, license
plates, automobile repairs or insurance, rent or house payments,
food, utilities, etc.
The operation of this loan fund is not to compete with local credit
unions or other lending institutions but to fill the needs of
University employees that are not being met by credit unions and
other comparable lending institutions.
A. Employee Eligibility:
1. Any career-status employee appointed to work 50 percent
time or more is eligible.
2. In special circumstances, loans may be made to
probationary and casual employees.
B. Loan Limitation, Interest Rate, and Repayment:
1. Only one loan may exist at any given time. The maximum
loan granted will be $1000 and the borrower's outstanding
obligation to the loan fund will not exceed $1000 at any
time. However, most loans will be made for $500 or less.
It is not the intent to combine loans to meet this
limitation.
2. Interest will be assessed at the current rate charged by
the University and State Employees Credit Union, presently
1-1/2 percent per month on the unpaid balance from the
date of the loan.
3. Repayments will be applied first to the interest due, and
any balance applied against the principal. There will be
no penalty for prepayments.
4. Repayments will commence no later than 45 days after the
date of the Promissory Note.
5. The maximum loan period will be one year, but the loan
period will be three months or less in most cases.
6. Under no circumstances will the loan period exceed the
period of appointment. All loans will be fully due and
payable upon termination of employment. If any portion of
the loan remains unpaid upon termination of employment or
upon death of the borrower, the University is authorized
to deduct the unpaid balance and accrued interest from
monies due and payable to the borrower.
7. Repayment of employee emergency loans are made by payroll
deduction or lump sum payment if the employee wants to pay
off the loan early.
C. Application:
Applications (Attachment A) for emergency loans are available
at and are to be submitted to the Personnel Office, South Hall
Room 3516, for approval.
D. Responsibilities for Administration:
1. Office of Staff Personnel:
a. Receive and review loan applications. Conduct
interviews to verify eligibility, information
submitted, and requirement of amount requested.
Establish repayment schedule. Determine and note on
application all previous loans requested.
b. As required, determine through the Accounting Office
the amount of loan funds available for disbursement.
c. Notify the applicant of the approval or disapproval
of the loan. Forward approved applications to
Accounting along with necessary forms for processing.
d. Prepare promissory note (Attachment B) and make 5
copies.
e. Prepare Form 5 (Request for Issuance of Check,
Attachment C). Retain yellow copy for records and
forward Form 5 and two copies of the promissory note
to the Accounting Office.
f. Obtain signature on original promissory note and
disburse check and promissory note copy to employee.
g. Forward signed copy of promissory note to Billing
Office.
h. Maintain complete records of the transaction
including log of loans approved and disapproved.
2. Billing Office:
Maintain complete records of the transaction and
repayment.
3. Accounting Office:
a. Prepare the check and forward it to Staff Personnel
Office.
b. If repayment is by payroll deduction, set up the
deduction process based on information furnished by
the Staff Personnel Office. In case of early
separation of a borrower on payroll deduction,
contact Billing Office for information on the unpaid
principal balance and accrued interest to be deducted
from the borrower's final paycheck.
III. ATTACHMENTS:
A. Employee Application for Emergency Loan
B. Promissory Note--Authorization for Payroll Deduction.
C. Form 5--Request for Issuance of Check
For questions or comments regarding the format of the above information, please contact webcontact@ucsbuxa.ucsb.edu.
Last Modified By: HMW, 5/21/97
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