I do not have a written policy, but have both lent and borrowed music before. If I am the lender, then i will write up a formal letter which I send or give with the music. I state the title, composer, and publisher of the piece, the number of copies, the loan date, and the expected return date. I have never loaned music to someone I did not know personally; if I were loaning music to someone I did not personally know then I am sure I would have a written contract.
Barry: Speaking for my late wife, she borrowed almost no music to my knowledge, but she would certainly have been willing to lend to choir directors in the area whom she personally knew and trusted. If she needed something specific, she would have been more likely to sit down and write it. Whether the church itself had a policy I do not know. As to larger scale lending to strangers, I doubt that either the priest or my wife would have been interested in doing so. Money for new music is ALWAYS in short supply for ANY church!