Loan Zone: A strong loan review system is good for your business

Building a robust process allows for greater agility while managing risk.

Regulators consider an effective loan review system vital to financial institutions’ efforts to meet safety and soundness standards. In fact, banking regulators are in the process of issuing updated guidance on loan or credit risk review systems as a standalone document (rather than including it in guidance related to the allowance for credit losses, as it is now) to emphasize their importance in broader risk management efforts.

But beyond making it easier to withstand examiners’ scrutiny, is a strong loan review system good for your credit union’s business?

Effective Credit Risk Review Promotes Lending Agility

Absolutely, says Ancin Cooley, principal with Synergy Bank Consulting and Synergy Credit Union Consulting, Elgin, Illinois. Cooley is a former Office of the Comptroller of the Currency examiner who provides loan reviews, outsourced credit analysis, strategic planning and risk appetite consulting. A strong loan review function is especially important for helping financial institutions be nimble, he explained during the recent webinar, “Best Practices for Credit Analysts.”


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