LTI's proprietary Risk Based Pricing System "RAPID" has been developed and enhanced over the past seven years through extensive research and review of empirical consumer loan data generated by credit unions. The following unique features and procedures differentiate RAPID from competing risk based pricing tools:

Enhanced Empirical Reliability and customization by considering:

• Credit Union Operational Risk Exposure multiplier (OREM)
• Underwriting Risk Exposure Multiplier (UREM)
• Collection and Asset Recovery Risk Multiplier (CARM)

• Built-in Weighted Averages report on critical risk factors
• Built-in Statistical borrower characteristics and profile reports
• Portfolio risk segmentation by Loan officer and Loan products

      LTI's proprietary Risk Based Pricing System "RAPID" was developed in 1991. "RAPID" uses a multivariate, statistically-based risk pricing model developed from empirical data in LTI's "Loan Loss Databases" as well as public data sources on regional economic data on a variety of factors affecting the performance of consumer loans.

      "RAPID" uses a 16 point, comprehensive underwriting and collections assessment procedure for calibration and customization of RAPID for each customer. RAPID is used by 12 credit unions in California, Oregon and Michigan with combined assets of over $1 billion.

      After assigning applicable risk ratings based on a physical review of the operational, underwriting and collections risk exposure of each credit union, the system utilizes LTI's databases to estimate the default probability of a borrower and the Loss Exposure at Default (LEAD) for each loan transaction.

      LTI's research shows that the combination of these qualitative and quantitative risk factors provide optimal statistical significance in estimating both the probability of default and the amount of losses in the event of default. Risk inflators are derived from this combined analysis and used in the pricing module to determine the applicable risk rate for each loan transaction.

Multivariate system, consistent pricing.