Offering insight into the latest trends, regulatory issues and member business lending best practices.

  • Let’s lose the balloon

    Jim GallagherBalloon maturities have historically been used by commercial banks to manage interest rate risk and to maintain control over the loan. The balloon is a hard due date that forces the borrower to either pay the balance of the note in full or negotiate new terms. Most regional and national banks moved away from the short term (3-5) balloon years ago.

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  • Best practices for using loan covenants to manage risk

    Nick Darvill

    MBS often receives examiner feedback, which we use to improve our member services. Lately, and considering the recent change in regulation from the prescriptive requirements to the current broad principals-based regulatory approach, MBS has noticed an uptick in examiner pressure related specifically to loan covenants. Of course, this is not unexpected since the NCUA has made clear they will focus on the effectiveness of a credit union’s risk-management processes.

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  • Saving money with an MBL CUSO is not as crazy as it sounds

    Cori Schmidt- Zdrazil In this cost-conscious business world, we are always trying to find ways to cut expenses to maximize our bottom lines. We walk a fine line between proper staffing of areas versus risk mitigation. So, am I crazy when I say you may very well save money by engaging an MBL credit union service organization (CUSO)?  Absolutely, not. Of course, how much your credit union may be able to save will depend on your volume of loans.

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  • Copy This Commercial Loan Tactic………..

    Diana KnightThis recent (well done) LinkedIn article by Chris Nichols reminded me of the power and usefulness of the loan modification strategy in retaining valuable loan relationships. While most of us may associate loan modifications with Trouble Debt Restructuring (TDR) they are also used widely as a defensive mechanism to retain desirable credits. A loan modification is simply a 1- 3 page document executed by the borrower that modifies specific terms of the original note and or mortgage.

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