Volume 1, Number 1 April 13, 2020Getting whipsawed by the news? Me too. Last week was the Dow’s Best Week since 1938!More that 16M Americans Have Lost Jobs in 3 Weeks! It’s hard to know how to react to two stories that paint such different pictures of the U.S. economy. Early return from the lockdown, …
Growth How do you view the growth of your credit union? There are a few perspectives: portfolio, membership, or share of member financial services. So often the people in their communities need capital to start or grow a business, and the credit union has what the community needs. That’s why commercial lending has become an …
How is the state of your portfolio? There are four detection methods that with a bit of effort or investment, you can figure it out. Part IV: Detection Methodology Detection of Issues Related to Guideline Deviations There’s this portfolio of loans, and you want to know whether it has any “issues.” Some methods allow you …
Have you ever found yourself saying; “BUT OUR ESTIMATES ASSUME GUIDELINES ARE FOLLOWED!” When it comes to loans, lenders must know the likelihood of repayment, whether collateral exists and what it is worth relative to the value of the loan. That’s why there are guidelines! But what happens when there are deviations from the guidelines? …
Guidelines are the means of determining whether or not to make a loan. Guidelines avoid risk which is important to multiple parties. In Part I of his series, “When The Lender Deviates From The Guidelines,” Charles Cowan, Ph.D. introduced what could go wrong when guidelines are not followed. Part II dives into three key considerations, …
Some community banks are using HR analytics to find links between their human resources departments and their operational and financial systems to improve performance and profits.
Guidelines are the means of determining whether to make a loan. When a borrower doesn’t meet the guidelines, this indicates that the lender doesn’t think the borrower is sufficiently creditworthy. In other words, the loan is too risky to make. So risky, in fact, that we don’t know how great the risk is we just know it’s …
In today’s Qualified Mortgage market, so much is made of automated underwriting systems that I fear the industry is somewhat paralyzed. Underwriters have regressed to being merely condition-clearing clerks rather than thoughtful, rational, common-sense decision makers. While there is clearly a place for automated underwriting in the QM market, I believe that, more broadly, our …
Is business lending a major (or even minor) consideration within your credit union’s lending portfolio? Scott McFarland, CEO of the $706 million Honor Credit Union, recently suggested to the Credit Union Executives Society that it should be:
“Stacking refers to a scenario in which borrowers take out multiple loans in a short time period, often using the new loan to fund repayments on older loans,” via Business Insider. There is a growing trend in commercial lending fraud called stacking.
