Commercial Lending Best Practices
Commercial Lending Tools
An Industry Task Force of senior commercial lenders has developed this set of "tools" and guidelines to assist credit unions in the management of their commercial loan portfolios. These tools cover the following:
| Credit Risk Ratings: | A computer assisted methodology for assigning a risk rating to each commercial loan. |
|---|---|
| Watch List Process: | A detailed description of recommended best practices to identify and manage this important Risk Management function. |
| Standard Industry Codes: | Standard Industry codes to be used for statistical reporting purposes and to identify / monitor portfolio risk concentrations. |
These materials provide suitable guidance to credit unions engaged in commercial lending for compliance with DICO’s By-law No.5. We wish to thank the Members of the Industry Task Force: Bruce Rodrigues, Brian Lawson, Rob Adamson, Dan O’Connor, Al Brooks, Brian MacDonald, Peter Collins, Frank Hakimi, Frank Kennes, Ed Boere, Barry Roth, John Klassen and Roger Honsberger for allowing us to publish these tools on our website and encourage all credit unions that are active in commercial lending to consider adopting the methodologies outlined. DICO proposes to employ the Credit Risk Ratings and Standard Industry Codes in its commercial lending risk assessment programs and is currently updating the Reference Manual to incorporate these guidelines.
Watch List Accounts
Credit Risk Ratings
Industry Codes and Concentration Risk
Sample Risk Rating Model
Risk Rating Template [XLSX]
NEW! Risk Rating Template provided by Central [XLSX]
Watch List - Summary Update [XLXS]
Commercial Credit Facility by NAICS Code (Industry Concentration Report)
Assessment Workbook: Commercial Lending