Posted By: Trees
pitfalls to loan exceptions - 01/27/09 09:57 PM
if someone were to ask you why its not a good thing to have loan programs/policies and then make exceptions to those polices your answer would be.....?
I feel that a bank would be open to possible discrimination, probably unintentional.
Anyone have any other arguments against making exceptions, or have comments about this topic, please feel free.
Posted By: rlcarey
Re: pitfalls to loan exceptions - 01/28/09 01:16 AM
Policy are designed to ensure that the bank operates in a safe and sound manner. The board approves the policies and a high amount of exceptions without following the documentation standards for acceptable compensating factors (that should also be included by the Board) indicate disregard for the board approved policies.
A high level of exceptions could possibly indicate that the policy is too restrictive (i.e. committee approval required for small-dollar loans, etc.). But generally speaking ... I agree wtih RLC.
Posted By: Mint Julep
Re: pitfalls to loan exceptions - 01/28/09 04:25 PM
Examiners will criticize an excessive number of exceptions to loan policy. They will also criticize if you are not tracking those exceptions.
Posted By: Trees
Re: pitfalls to loan exceptions - 01/28/09 05:10 PM
We are tracking them and, so far, there aren't too many...