Similar to identity theft, this type of fraud happens when an unauthorized individual gain access through online banking applications, capturing the account information to create and write bad checks.
An adverse action notice is a document sent to a loan applicant stating a bank’s rationale for denying a loan. It may also contain a counteroffer, such as a lesser amount or a request for an approved co-borrower.
The term “aging exceptions” refers to a group of critical exceptions that have not been resolved within a reasonable amount of time.
Altered check fraud occurs when a fraudster changes the amounts and Payee from a stolen check.
Audit and exam prep is a process that financial institutions go through in order to adequately prepare for upcoming audits and exams.
An authorized signer form is a document that allows an account holder to grant a range of clearance levels to individuals to perform certain functions within a bank account.

Commercial credit analysis ratios are used by underwriters in business loan determinations. Since companies do not have a credit score as consumers do, financial institutions rely on other factors, such as commercial credit analysis ratios, to gauge a business’s creditworthiness and make an informed lending decision.

Types of Commercial Credit Analysis Ratios

Although commercial underwriting practices vary from institution to institution, banks and credit unions often use five ratios to determine business loan viability:

  • Debt service coverage
  • Profitability
  • Liquidity
  • Activity
  • Market
  • Rules and Exceptions

An underwriter consults his or her financial institution’s policies to guide decisions on commercial loan applications. Many banks and credit unions set cut-off limits on commercial credit analysis ratios and deny loans that fall short of the minimum standards.

However, there are situations when banks and credit unions make exceptions to their policies. This is often referred to as a “policy exception” or “loan policy exception.” In such cases, the mitigating circumstances should be documented and tracked for compliance purposes.

Tracking Policy Exceptions with Technology

Part of a financial institution’s exam preparation usually includes gathering all approved loans that were exceptions to its loan policy. In anticipation of this exam requirement, banks and credit unions commonly maintain spreadsheets that contain their loan policy exceptions. Spreadsheets have several drawbacks, especially when the institution fails to add a loan policy exception to the list.

Today, financial institutions are increasingly relying on loan management software, such as AccuAccount, to document the reasons why a loan was made outside of normal policy, flag policy exceptions, generate specific reports, and pull necessary loan files.

Loan Management Resources

Looking for more tips on managing loan documentation and policy exceptions? Be sure to check out our extensive resource library with free spreadsheets, whitepapers, videos and eBooks.

Browse our banking definitions page for more terminology.

Explore more resources

Alogent + Antuar: Next-Gen Teller Capture

Together, Alogent’s Unify, and Antuar’s inBranch Transact, bring modern capabilities to banks and credit unions looking to refresh their teller capture solutions, streamlining transaction workflows from the teller, to the Fed, and back. This seamless...
Read More »

Related articles

Monday 8 July 2024

How to Prepare for an Audit or Exam with AccuAccount

Compared to pulling paper loan files, using AccuAccount can make audit and exam prep faster and easier. But how does it actually work? Let’s break…

Read the Blog

Thursday 27 June 2024

Check Fraud: A Growing Concern for Business Owners and What your Financial Institution Can Do

As a way to streamline deposit processes and expedite cash flows, corporates and merchants of all sizes have embraced remote deposit capture (RDC) solutions from…

Read the Blog

Monday 24 June 2024

Gaining a Holistic View of Banking Relationships with AccuAccount

Banking relationships can be incredibly complex. After all, one commercial customer might be connected to dozens of entities, loans, and accounts. To see the bigger…

Read the Blog

Monday 17 June 2024

Enhancing a Financial Institution's Information Lifecycle Management Strategy with Process Automation Solutions

In the dynamic landscape of Information Lifecycle Management, process automation solutions play a pivotal role. These solutions streamline workflows, from data creation to disposal, ensuring…

Read the Blog

Wednesday 12 June 2024

4 Tips for Faster, Easier Loan Management Audits

Audits and exams are stressful—and time-consuming. Preparing for an audit or exam involves a lot of document-related activities, which is why a system like AccuAccount…

Read the Blog

Wednesday 29 May 2024

The Importance of Account Holder Education: Best Practices that will Keep Digital Banking Users and Your Institution Safe from Fraudsters

Financial institutions often hesitate to enforce complex password requirements and regular password changes in their security policies due to concerns about inconvenience, which could lead…

Read the Blog

Tuesday 21 May 2024

Is Inefficient Loan File Management Costing You $100K+ Per Year?

Change often comes with a cost. For financial institutions looking to improve their existing loan file management workflows, this cost may involve acquiring software, implementing…

Read the Blog

Monday 13 May 2024

Unraveling the Complexity: How ECM/EIM Solutions Tackle Information Chaos

In today's digital age, data is often hailed as the new currency. However, this surge in data production has given rise to a new challenge…

Read the Blog