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Commercial Risk Rating Considerations

Risk rating is integral to underwriting and managing commercial loans. The lifecycle of a risk rating system extends from policy development through individual risk rating assessments to monitoring the overall system.

This whitepaper seeks to provide an overview of this lifecycle as it relates to individually managed credits. The conclusions and recommendations are based on regulatory guidance from the Federal Reserve Board of Governors (FRB), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Company (FDIC), the National Credit Union Administration (NCUA), poll results from over 75 webinar participants and the writer’s experience. Each institution will need to determine the best way for it to integrate these practices based on its size and complexity.