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.
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

Remote Deposit Capture (RDC) eBook

Remote deposit capture (RDC) ranks as a significant feature of modern banking. In fact, a San Global Research industry report projects the RDC market to grow at a compounded rate of 5.8% through 2032. As the banking industry continues its digital...
Read More »

AccuAccount: Solution Overview Brochure

Track and manage every loan document in one system and streamline loan management from application through servicing with our core-integrated software platform. From loan application automation, to drag-and-drop document imaging, to document tracking, and five...
Read More »

Related articles

Tuesday 26 March 2024

Check Fraud: Common Examples and How to Stay Ahead of the Fraudsters

Check fraud is the most prevalent type of fraud at financial institutions, costing billions of dollars in losses annually, while impacting millions of account holders…

Learn More »

Wednesday 20 March 2024

Accelerating Efficiency by Leveraging Alogent’s Full Suite of Process Automation Solutions

Why should your bank or credit union consider implementing FASTdocs alongside AccuAccount? For financial institutions looking to retire legacy systems, consolidate vendors, and reduce paper-based…

Learn More »

Thursday 14 March 2024

Show Me the Money: Best Practices to Accelerate Funds Availability through Check Deposits

The Financial Brand recently published an article highlighting how faster access to funds could reshape the battle for deposits. Would you implement new processes if…

Learn More »

Tuesday 12 March 2024

With Delinquencies on the Rise, It’s Time to Rethink Collateral Perfection & Risk Management

Delinquent loans seem to be on the rise at financial institutions across the United States. Such trends may indicate macroeconomic difficulties, but they also pose…

Learn More »

Tuesday 5 March 2024

3 Loan Management Workflows to Help You Save Time & Drive Efficiency

Automating a single task may not seem like a big savings in the grand scheme of things. But, what if that task occurred multiple times…

Learn More »

Monday 26 February 2024

Banking Innovation: Are You Keeping Up with Transaction Processing Trends Shaping the Banking Market?

The payments landscape continues to take shape with alternative payment and cashless transaction methods, yet in the face of persistent digitalization, checks remain a viable…

Learn More »

Thursday 15 February 2024

Meeting Gen Z’s Banking Demands and Remaining Relevant with the Largest Generation in American History

The year is in full swing, and financial institutions are keenly observing the emerging powerhouse of economic influence: Generation Z. This generation isn’t just digitally…

Learn More »

Tuesday 6 February 2024

From Loan Imaging to Cold Storage: Extend AccuAccount’s Automation Potential with Additional Content Management Capabilities from Alogent

Efficient document and information management is increasingly important for modern financial institutions. Paper documents, siloed information, and outdated technology create operational bottlenecks that can be…

Learn More »