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.
Account-centric enterprise content management solutions allow users to access account holder information based on their account numbers.
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.
API is short for “application programming interface.” Technology companies like Alogent rely on APIs to connect multiple software applications, thereby enabling a two-way exchange of information to support users’ needs.
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.

Collateral Exception

In banking, an exception is an item that needs attention because it does not meet certain predefined requirements. Collateral exceptions pertain to borrowers’ assets that are pledged for loans. Financial institutions often consider collateral exceptions “critical” due to the risk they pose if left unresolved.

Types of Collateral Exceptions

Examples of collateral-related exceptions include:

  • Expiring UCC Continuations: Documenting a lien on untitled assets like equipment or livestock typically involves filing a UCC financing statement. Maintaining first position on a lien requires careful monitoring and prompt filing of continuations prior to expiration. Failing to take action could result in the loss of a lien position and considerable risk.
  • Past Due Collateral Inspections: Financial institutions may need to inspect the value of assets that are used as collateral. For example, a manufacturer who pledges inventory as collateral would likely expect regular inspections from the lender. Forgetting to conduct inspections leads to exceptions for financial institutions.
  • Missing Documentation for Accounts Receivable: Some businesses leverage their accounts receivable as collateral on loans. Receivables change frequently, which creates a documentation obligation for the borrower. When borrowers do not submit their information as required, collateral exceptions increase.
  • Uncollected Trailing Documents for New Mortgages: Documents that are collected after a loan’s consummation date are known as trailing documents. Obtaining a recorded mortgage (or deed of trust) from the local recorder’s office is a key step for avoiding exceptions.
  • Missing Insurance on Collateralized Equipment: Fires, floods, and other natural disasters can have devastating consequences to an asset’s value. It’s therefore no surprise that financial institutions require borrowers to maintain proper insurance coverage on collateralized assets. Failing to submit necessary insurance documentation may indicate that a policy has lapsed.

Tracking Collateral Exceptions

Spreadsheets and tickler files are relatively common solutions for tracking collateral exceptions.  Manual data entry and reporting workflows can be error-prone, resulting in a growing number of collateral exceptions. Given the critical nature of collateral exceptions, such approaches may expose a financial institution to unnecessary risk.

AccuAccount, Alogent’s ECM system that’s optimized for commercial lending, reduces manual data entry via automated core data feeds. Document placeholders keep staff informed about required documents. Expiration dates and automated exception reports help users identify potential issues before they become exceptions. Scanning missing documents can simultaneously clear multiple exceptions when collateral is pledged to more than one loan.

Contact Alogent to learn about our collateral tracking solution
 

Explore more resources

Related articles

Thursday 26 March 2026

From Fragmentation to Focus: Why Vendor Consolidation Is a Modern CIO’s Mandate for Financial Institutions

As technology leaders in banking and financial services, we rarely inherit a clean slate. We inherit technology environments built over decades, with systems added to…

Read the Blog

Tuesday 24 March 2026

Document Versioning: The Digital Staple for Financial Institutions—Bringing Clarity, Control, and Compliance to the Document Lifecycle

Have you ever sifted through a packet of stapled papers, trying to figure out which version of a form was the “right” one? In branches…

Read the Blog

Wednesday 18 March 2026

[Playbook] Strengthening Commercial Deposit Strategy with Unify’s Merchant Capture Capabilities

Corporate and merchant clients demand enterprise grade digital deposit capabilities that support complex cash management operations without compromising speed, security, or operational control. For businesses…

Read the Blog

Monday 16 March 2026

[Playbook] Saving Commercial Lenders Time During Tax Season

Accountants aren’t the only people who feel stressed during tax season. Commercial lenders and their assistants feel the pressure, too—especially when borrowers forget to submit…

Read the Blog

Thursday 12 March 2026

Unlock Greater Banking Efficiency with Alogent’s ECM Suite: AccuAccount + FASTdocs

Did you know: Alogent’s ECM software suite includes two powerful tools: AccuAccount and FASTdocs. Both systems were built for the specific needs of financial…

Read the Blog

Thursday 5 March 2026

The Check Fraud Shift: How Declining Volume Is Creating Higher Risk for Banks and Credit Unions

Check fraud remains a material and growing risk for banks and credit unions, and the data underscores why it demands renewed attention. Alogent’s newly published…

Read the Blog

Tuesday 3 March 2026

Ask the Experts: The Hidden Cost of Standing Still on Deposit Modernization

Deposit operations are undergoing rapid change. As real‑time payments, evolving fraud threats, and digital‑first expectations reshape the banking landscape, banks and credit unions are reassessing…

Read the Blog

Thursday 26 February 2026

Secure Document Collection for Banks and Credit Unions: Eliminating Risk and Friction

Collecting and managing documents remains a challenge for banks and credit unions, who often depend on manual, fragmented processes to exchange information with account holders…

Read the Blog