Independent Commercial Loan Reviews

As the economy continues to experience inflation and higher interest rates, Regulators are placing a higher point of emphasis on portfolio management and risk mitigation.

As outlined in the January 2023 Supervisory Letter, Credit Risk will be a supervisory priority and state and federal examiners will review the soundness of existing lending programs, any adjustments your credit union made to loan underwriting standards and portfolio monitoring practices, and loan workout strategies for borrowers facing financial hardships. State and federal examiners will carefully consider all factors in evaluating your credit union’s efforts to provide relief for borrowers, including whether the efforts were reasonable and conducted with proper controls and management oversight.

Why Choose to Partner with DFTC for your Commercial Loan Review?

DFTC is an industry leader in performing Loan Reviews and its reputation in this area is second to none. FTC works with numerous credit unions to enhance their internal due diligence, improve credit risk management, and help commercial departments prepare for regulatory exams.

DFTC Independent Commercial Loan Review services offer a comprehensive assessment of the Client’s compliance with its loan policies, lending procedures and processes. We examine the Client’s risk rating system and its credit risk rating assignments to assure proper portfolio credit risk levels are identified and that the credit risks identified are reported appropriately and remain consistent with the Client’s overall credit culture. Additionally, we evaluate the Client’s commercial and business lending personnel, staffing levels, underwriting methodologies, loan administration and risk management effectiveness. DFTC will provide your team with an executive summary report for each loan review that highlights our findings and recommendations that will assist in strengthening your team’s program. Further, our entire engagement process will be inclusive of a policy review document and individual working papers for each loan reviewed to satisfy all regulatory requirements.

To establish a statement of work, DFTC has an independent loan review questionnaire for clients to complete to assist in identifying basic portfolio demographics. Once we have this information, DFTC can provide you with a detailed statement of work for consideration.

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