Our Sr. Lender wants to require a minimum credit score as a prerequisite to making a loan with our bank. Would anyone like to express an opinion on this practice? If your bank does require a minimun score, how was that number determined?

If you are using an empirically derived, demonstrably and statistically sound, credit scoring system, I would assume there would be a minimum. If judgemental over-rides are allowed, more fair lending review may be in order.

My past experience as a mortgage broker/lender showed me that nationally with 300 different lenders including Fannie and Freddie, a score of 620 and up was considered conforming or conventional, some lender used 640 and some would go as low as 600 with good liquid assets on balance sheet. I have seen a loan approved conforming with secondary market with a 580 score! when you talk "B" paper or non-conforming or non-traditional lenders out there (subprime) most would only go to 520 as a minimum.
hope this helps as a guide

First, if you use a minimum score, don't allow any exceptions without thorough documentation and a good reason. Examiners look at all the exceptions. They make easy pickings.

Second, the sub-prime lending guidance issued by the agencies last year uses 660 as the line between prime and sub-prime. This is much higher than what most institutions had been using. The answers above give good guidance on what most banks have been using as a guide. You can use numbers below 660 (and if you don't, you'll lose a lot of potential customers) but be prepared to answer the examiners questions about your sub-prime lending program.