Credit Decision & Price Monitoring For Small Business

Credit Price MonitoringDescription

Preiss&Associates’ Credit Decision Monitoring™ and Credit Price Monitoring™ for Small Business help financial institutions scrutinize their small business loan portfolios for possible disparate treatment issues with respect to the credit granting decision process and the credit pricing decision process. Credit Decision Monitoring™ uses logistic regression, a specialized form of multiple regression analysis, to assist institutions in identifying possible differential treatment issues in the small business credit granting process employing the same procedures the federal regulators use when they perform their fair lending exams. Similarly, Credit Price Monitoring™ assists institutions in identifying possible credit pricing issues in their small business loan portfolios.

Uses

  • Tests for unintended differential treatment in the credit granting or pricing processes for the institution’s small business loan portfolio.
  • Identifies application files that need to be manually reviewed to assure the proper file documentation to justify the credit decision made or validate the interest rate charged.
  • Assures consistency in the credit granting or credit pricing decisions across the institution.

Benefits

  • Identifies small business credit decision applications that may have fair lending compliance issues
  • Matches small business credit decision exception applications with similarly situated applications in the small business loan portfolio
  • Cost effective versus manual small business monitoring processes
  • Statistically reviews the small business credit decision on all loans in the portfolio, not a sample
  • Explains the factors important in the institution’s small business credit decision
  • Identifies small business pricing decision applications that may have fair lending issues
  • Matches small business pricing decision exception applications with similarly situated applications in the small business loan portfolio
  • Cost effective versus manual small business monitoring processes
  • Statistically reviews the small business pricing decisions on all loans in the portfolio, not a sample
  • Explains the factors important in the institution’s small business pricing decision

For more information and a full discussion of your requirements, please contact us here.