PRIME LINE HOME EQUITY APPLICATION DISCLOSURE

MEMPHIS AREA TEACHERS' CREDIT UNION 
7845 HIGHWAY 64 
MEMPHIS, TN 38133

IMPORTANT TERMS OF OUR 
HOME EQUITY LINE OF CREDIT

This disclosure contains information about our PRIME LINE Home Equity Line of Credit (the "Plan"). You should read it carefully and keep a copy for your records. 

AVAILABILITY OF TERMS. All of the terms described below are subject to change. If any of these terms 
change (other than the annual percentage rate) and you decide, as a result, not to enter into an agreement with us, you are entitled to a refund of any fees that you paid to us or anyone else in connection with your application.

SECURITY INTEREST. We will take a security in your home. You could lose your home if you do not meet the obligations in your agreement with us. 

POSSIBLE ACTIONS.
Termination and Acceleration. We can terminate the Plan and require you to pay us the entire outstanding balance in one payment, and charge you certain fees, if any of the following happen:

(a) You commit fraud or make a material misrepresentation at any time in connection with the Plan. This can include, for example, a false statement about your income, assets, liabilities, or any other aspect of your financial condition. 

(b) You do not meet the repayment terms of the Plan. 

(c) Your action or inaction adversely affects the collateral for the Plan or our rights in the collateral. This can include, for example, a failure to maintain required insurance, waste or destructive use of the dwelling, failure to pay taxes, death of all persons liable on the account, transfer of title or sale of the dwelling, creation of a senior lien on the dwelling without our permission, foreclosure by the holder of another of another lien or the use of funds or the dwelling for prohibited purposes.

Suspension or Reduction. In addition to any other rights we may have, we can suspend 
additional extensions of credit or reduce your credit limit during any period in which any 
of the following are in effect: 

(a) The value of your dwelling declines significantly below the dwelling's appraised value for purposes of the Plan. This includes, for example, a decline such that the initial difference between the credit limit and the available equity is reduced by fifty percent and may include a smaller decline depending on the individual circumstances. 

(b) We reasonably believe that you will be unable to fulfill your payment obligations under the Plan due to a material change in your financial circumstances.

(c) You are in default under any material obligation of the Plan. We consider all of your obligations to be material. Categories of material obligations include, but are not limited to, the events described above under Termination and Acceleration, obligations to pay fees and charges, obligations and limitations on the receipt of credit advances, 
obligations concerning maintenance or use of the dwelling or proceeds, obligations to pay and perform the terms of any other deed of trust, mortgage or lease of the dwelling, obligations to notify us and to provide documents or information to us (such as updated financial information), obligations to comply with applicable laws (such as zoning restrictions), and obligations of any guarantor or comaker. No default will occur until we mail or deliver a notice of default to you, so you can restore your right to credit advances. 

(d) We are precluded by government action from imposing the annual percentage rate provided for under the Plan.

(e) The priority of our security interest is adversely affected by government action to the extent that the value of the security interest is less than 120 percent of the credit limit. 

(f) We have been notified by governmental authority that continued advances may constitute an unsafe and unsound business practice. 

(g) The maximum annual percentage rate under the Plan is reached.

Change in Terms. We may make changes to the terms of the Plan if you agree to the change in writing at that time, if the change will unequivocally benefit you throughout the remainder of the Plan, or if the change is insignificant (such as changes relating to our data processing systems).

FEES AND CHARGES. In order to open and maintain an account, you must pay certain fees and charges.

    Lender Fees. The following fees must be paid to us:                                                                               
   

                                                               
    Other Lender Fees. If certain activities occur on your account, we will impose certain fees that will be set   forth in your Account Agreement. The following fees will be imposed upon the occurrence of the designated events.

Late charges: Your payment will be late if it is not received by us within 9 days of the "Payment Due Date"        shown on your periodic statement. If your payment is late we may charge you up to $15.00.

Third Party Fees. You must pay certain fees to third parties such as appraisers, credit reporting firms, and government agencies. We also will pass on any third party changes as part of an annual review of your account, in amounts estimated to be similar to those discussed below. These third party fees generally total $0.00. We estimate the breakdown of these as follows:

PROPERTY INSURANCE. You must carry insurance on the property that secures the Plan. 

MINIMUM PAYMENT REQUIREMENTS. You can obtain advances of credit during the following period: 
Ten (10) years (the "Draw Period"). After the Draw Period ends, the repayment period will begin. You will no longer be able to obtain credit advances. The length of the repayment period is as follows: At maturity. Your Regular Payment will equal the amount of your accrued finance charges. You will make 119 of these payments. You will then be required to pay the entire balance owing in a single balloon payment. If you make only the minimum payments, you will not repay any of the principal balance by the end of the Plan. Your payments will be due monthly. Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges.

MINIMUM PAYMENT EXAMPLE. If you made only the minimum payment and took no other credit advances, it would take 10 years to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 7.750%. During that period, you would make 119 monthly payments ranging from $59.45 to $65.82 and one final payment of $10,065.82.

TRANSACTION REQUIREMENTS. The following transactions limitations will apply to accessing your Credit Line by Credit Card.
    Maximum Number of Advances Per Period. The maximum number of advances that you may obtain per Day is 7. 

TAX DEDUCTIBILITY. You should consult a tax advisor regarding the deductibility of interest and charges for the Plan.

VARIABLE RATE FEATURE. The Plan has a variable rate feature. The annual percentage rate (corresponding to the periodic rate), and the minimum payment amount can change as a result. The annual percentage rate does not include costs other than interest. 

The Index. The annual percentage rate is based on the value of an index (referred to in this disclosure as the "Index"). The Index is the Wall Street Journal Prime Rate. Information about the Index is available or published in the Wall Street Journal under "Money Rates". We will use the most recent Index value available to us as of the last day of each month any annual percentage rate adjustment. If the Index is no longer available, we will choose a new Index and margin. The new Index will have an historical movement substantially similar to the original Index, and the new Index and margin will result in an annual percentage rate that is substantially similar to the rate in effect at the time the original Index becomes unavailable.

Annual Percentage Rate. To determine the annual percentage rate that will apply to your account, we refer to the value of the Index. A change in the Index rate generally will result in a change in the annual percentage rate. The amount that your annual percentage rate may change also may be affected by the lifetime annual percentage rate limits, as well as our right to carry over unimposed annual percentage rate increases, as discussed below. 

Carryover of Unused Index Changes. We may carry over changes in the Index that we have not 
passed on as changes in the annual percentage rate, and we may apply them to subsequent annual percentage rate adjustments. Any accumulated carryover of unused Index changes unimposed after an annual percentage rate adjustment may be carried over to a subsequent annual percentage rate adjustment. 

Please ask us for the current Index value, margin and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you.

FREQUENCY OF ANNUAL PERCENTAGE RATE ADJUSTMENTS. Your annual percentage rate can change Monthly. There is no limit on the amount by which the annual percentage rate can change during any one year period. However, under no circumstances will your ANNUAL PERCENTAGE RATE exceed 18.000% per annum at any time during the term of the Plan.

MAXIMUM RATE AND PAYMENT EXAMPLE. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18.000% would be $152.88. This annual percentage rate could be reached at the time of the 2nd payment.

PREPAYMENT. You may prepay all or any amount owing under the Plan at any time without penalty. 

ADDITIONAL PROVISIONS. A close out fee of $250.00 will be charged if the account is closed out within 36 months of the opening date. 

HISTORICAL EXAMPLE. The example below shows how the annual percentage rate and the minimum payments for a single $10,000.00 credit advance would have changed based on changes in the Index from 1988 to 2002. The Index values are from the following reference period: as of the balances could result in different payment amounts.

The table assumes that no additional credit advances were taken and that only the minimum payment was made. It does not necessarily indicate how the Index or your payments would change in the future.

INDEX TABLE

_{Variable Rate. Line of Credit.}