DASKY YARBER ASSOCIATES

The average U.S. financial institution invests 60% of its assets in loans to retail consumers and commercial businesses.  

This makes an expert, independent review of lending quality a critical component of an overall internal audit plan.

Lending quality review services help you answer critical questions:

• Does our loan portfolio reflect the quality of loans that our policies were designed for?
• How effective are our procedures for loan origination, monitoring, and collection?
• Are opportunities for improvement in our lending administration isolated or do they reflect systemic issues that deserve more attention?
• Does our loss reserve calculation reflect economic and portfolio trends as well as include loans that should be individually classified?

Do we recognize risk rating changes in individually significant loans in a timely and accurate manner?

What We Do

We are credentialed lending quality review experts with 43 combined years of experience. 

We provide lending, compliance, and risk managers with a fresh, independent assessment of lending quality.  In addition to helping management determine if loan loss reserves are sufficient, this information is essential to validate compliance with regulations, policies, and procedures. 

Take advantage of our retail and commercial lending, regulatory, and public accounting experiences.  These positions have given us the skills to help financial institutions determine if their lending controls are sufficiently designed and functioning.

Elements of a lending quality review system

Loan review policies should be reviewed and approved annually by the board of directors.  The policy should address:

• Qualifications and independence of loan review personnel;

• Scope, frequency, and depth of reviews;

• Review of findings and follow-up, and;

• Workpaper and report distribution.

Commercial loan officers could be responsible for ongoing credit analysis and the prompt identification of emerging risks. 

Management should ensure that all loans of interest are reviewed by qualified personnel who are not associated with the approval process.