Software for managing the loan portfolio can range from spreading and credit analysis through impairment analysis or sale of the loan. In most cases, the adoption of such software requires a change in process as well as an investment from the financial institution. In addition to total cost of ownership, what other considerations should an institution have for evaluating potential software and its vendor? In this guide, we present four, major areas to review for each vendor under consideration:
- Company Background
- Software Functionality
- Implementation & Support
- Information Security
The various regulatory agencies overseeing the U.S. banking system have made it clear that the loan review function is a critical component of effective loan portfolio management for banks and credit unions. How can your institution set up the loan review function to both satisfy regulatory pressure but also yield greater information for decision making for your institution?
Download this whitepaper to learn:
- What is loan review
- How the loan review function should be organized
- Keys to effective loan review
- Obstacles to avoid in the loan review process
Resources on the FASB’s new current expected credit loss (CECL) model are many, but how can you focus on the most important action items? Download the Top 10 CECL Tips for a list of specific takeaways you and your institution can use to form your CECL transition plan or audit your existing project plan and team.
The FASB’s Accounting Standards Update, Topic 326 (CECL) released in June 2016 presents institutions with new guidance for measurement of an Allowance for Credit Losses (ACL, or ALLL). We regard the transition as fundamentally a project management problem. There exists a specific set of activities that, if performed correctly and thoughtfully, will produce a compliant estimate of credit losses over the life of a financial asset. The documentation of that set of activities is the purpose of this Practical CECL Transition Guide: a series of 8 whitepapers to better assist with your transition.
SECTIONS IN THIS GUIDE:
- Introduction
- Guidance summary
- Peer and industry data
- Expedients versus cash flows
- Qualitative policy
- Loss driver analysis
- Discounted cash flow
- Selected benchmark credit loss reserves
The Current Expected Credit Loss (CECL) accounting standard, ASU 2016-13 (Topic 326), outlines that the allowance for credit losses should be a valuation account deducted from the amortized cost basis of financial assets. Amortized cost basis includes, but is not limited to, adjustments for accrued interest, unamortized premium and discounts, and net deferred fees or costs. Entities’ valuation techniques should present the net amount expected to be collected on the financial asset. This document is intended to cover amortized cost basis application, specific guidance, and conceptual soundness under the context of ASU 2016-13 (Topic 326).
In this whitepaper:
- Amortized cost fields and descriptions
- Amortized cost basis considerations for DCF
- Example scenarios of application
As large banks move to technology-based scoring and decisioning to gain market share in small business lending, community banks can also implement a smarter lending process to see similar benefits. Today’s technology affords community banks the ability to level the playing field by customizing, streamlining and automating their loan scoring and decisioning so they can produce good loans faster.
Learn how automated loan scoring and decisioning could benefit your institution’s lending process.
Download to learn:
- How to customize the scoring process
- How to streamline the loan decisioning process
- How automated scoring and decisioning benefit risk management
The CECL standard grants institutions broad latitude in the data and information used in measurement; the standard is non-prescriptive in methodologies to be used (though does go so far as to enumerate several sensible options). A great deal of content from the supervisory and accounting communities, as well as other practitioners, focuses on simple analyses that are mentioned in the standard – loss-rate and vintage approaches are commonly discussed.
In this case-study focused paper, we first examine problems with a specific institution’s loss-rate approaches and then construct a defensible projection of lifetime credit loss without meaningful first-party losses or historical loan-level detail.
In this whitepaper:
- Initial assessments of loss rate, vintage, remaining life, and segmentation approaches
- Analysis and synthesis of the information discussed
- Application with Rocket Bank’s information
Credit risk policy should be both stable and dynamic to meet the needs of the organization. Stable in that the underlying premises on which the policy is built should not change haphazardly. Dynamic in that the bank needs flexibility to meet changing market conditions while maintaining its credit culture.
Download to learn:
- Understand the overall credit policy framework
- Discuss ways to ensure credit professionals understand what they are expected to do and actually do it
- Discover tools to assess and control key risk areas
Banks are bracing for the impact that the current expected credit loss (CECL) model may have on their institutions and forming implementation plans now. How can bank leaders distill the next best steps for their institution? In this paper, Abrigo defines realistic and approachable steps for compliance with the CECL standard.
Download to learn:
- How to coordinate needed departments
- Understand the loan-level data requirements
- Identify procedures that may need changed
- Evaluate build vs. buy options
What Is The Right CDD/EDD Solution For Your Institution?
When it comes to choosing a CDD/EDD solution make sure you consider all the factors.
FinCEN’s Final Ruling on Customer Due Diligence requirements for financial institutions calls for a number of changes that will affect every financial institution as it works to cultivate new relationships, open new accounts, and monitor its customer/member base.
As your institution navigates through project plans to comply with the updated CDD rule, it is important to take a step back and look at the broader picture to ensure success across all the affected lines of business. We have outlined five key steps towards a successful program review and regulatory implementation.
