RBL Quality Control
Quality control measures may include, although are not limited to, the following:
- Code loans by risk tier (1, 2, 3 or A, B, C) and monitor delinquency and losses by tier. At a minimum, code and track the highest risk tiers. Adjust criteria if delinquency or losses are unacceptable. Retain monitoring reports to support the business purpose of the criteria adjustment.
- Evaluate portfolio risk by tracking delinquency and performance of loans based upon the origination date.
- Analyze the net income contribution of each tier of the portfolio prior to implementation and quarterly thereafter to determine whether loans are priced appropriately and fairly.
- Evaluate all rejected applications (i.e., some applications that are rejected by a scoring system may not measure true credit-worthiness).
- Review performing loans after a specified period (i.e., 6-12 months) and upgrade to lower rates when repayment and credit performance places the borrower into a new tier.
- Closely monitor member complaints for signs of potential discrimination or problem employees.
- Re-evaluate the risk-based lending policies, procedures, and overall program periodically and retain documentation of the evaluation process.
- Conduct a self-assessment to review overall program compliance. A self-assessment may be performed internally or through the use of outside consultants.