Loan Grading and Review Policy
The purpose of this Loan Grading and Review Policy Template is to address the requirements of a bank, credit union, fintech company, or other type of financial institution to assign appropriate loan grades to effectively rate the overall strength of its loan portfolio, and to implement a timely, independent and accurate evaluation and formal loan review process of all loans.
Table of Contents
- Purpose and Contents – Topic 1
- Policy Statement – Topic 2
- Loan Grading Policy Statement
- Loan Review Policy Statement
- Exceptions to Policy
- Credit Administration and Committee Responsibilities – Topic 3
- Credit Administration
- Directors’ Loan Committee
- Special Assets Committee
- Loan Grading System – Topic 4
- Loan Risk Grade Categories
- Upgrade Procedures
- Downgrade Procedures
- Split Grade Procedures
- Automated Credit Scoring – Topic 5
- Credit Scoring Guidelines and Methodology
- Exceptions to Underwriting Decisions and Override Authority
- Model Documentation
- Model Management and Tracking
- Program Reporting
- Loan Officer Responsibilities – Topic 6
- Supporting Information
- Guarantees and Third Party Support
- Terms and Documentation
- Other Considerations
- Credit File Availability
- Loan Review System – Topic 7
- Secondary Review and Credit Denial
- Quality Control and Assurance
- Loan Review Scope
- Depth of Transaction or Portfolio Reviews
- Other Factors and Conditions
- Qualifications of Loan Review Personnel Standards
- Independence of Loan Review Standards
- Frequency of Review Standards
- Review of Findings and Follow-Up Standards
- Communication and Distribution of Results
- Internal Loan Review
This Loan Grading and Review Policy Template (approximately 33 pages) is available to purchase from BankPolicies.com in Microsoft® Word format.
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