Submitted by sevans on Tue, 12/02/2014 - 3:26pm

Risks in Business Lending:

Business Lending Concentration Risks:

The credit risk assessment should identify potential concentrations by stratifying the portfolio into segments that have common risk characteristics or sensitivities to economic, financial, or business developments.

 

Business Loan Participation Risks

Credit unions that are actively involved in loan participations and/or purchasing nonmember business loans should maintain risk management systems that appropriately address the level of risk associated with these loans. Credit unions should perform due diligence over the ongoing servicing at least annually and develop trigger points for action with originator when the loan does not perform in accordance with the loan documents (i.e. delinquency, missing financial statements, noncompliance to loan covenants).

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