CUNA Business lending Final Exam
Study Test.
Credit administration is: - CORRECT ANSWER 1) defines culture and risk tolerance
2) Establishes and manages processes related to loan generation
3) creates and maintains portfolio quality
4) supports loan production
5) provides high level direction for frosty and profitability
The commercial lending policy must be approved by - CORRECT ANSWER The board of directors
List the 8 minimum requirements to be addressed in a policy per sedition 723.4 of ncua rules and
regulations - CORRECT ANSWER 1) types of commercial loans permitted
2)trade area
3) portfolio concentration limit
4) single borrower limits
5)qualifications and experience requirements for lending staff
6) loan approval process
7) underwriting standards
8) risk management processes
First and foremost procedures should____ - CORRECT ANSWER Adhere to the policy
The _____ must be reviewed at least annually and updated when warranted. - CORRECT ANSWER
Comercial loan policy
List 5 types of reports that should be regularly reviewed by management/board regarding the
commercial loan portfolio of the credit union - CORRECT ANSWER 1) total MBL / commercial
outstanding
2) single borrower / associated borrower (largest relationship)
, 3) concentration (collateral, loan type, geographic, rate, and term)
4) overalls credit risk rating trends
5) loan growth and trends
6) loans and approved policy exceptions
7) DQ and trends
8) CO and trends
9) workouts, mods, and TDRs
10) troubled loans (watchlist)
11) commercial loans approved and denied
12)compliance with all established policy limits
13) program profitability
The ____ is ultimately accountable for the safety and soundness of the CUs commercial lending activities
- CORRECT ANSWER CU BOD
Per 723.3, a federally insured CU BOD must _______ and _____ about the nature and level of risk in the
commercial loan portfolio, including its potential impact on the CUs earnings and net worth - CORRECT
ANSWER Understand
Remain informed
List two internal ways CUs can meet staffing experience requirements - CORRECT ANSWER Train and
develop existing staff
Hiring experienced professionals
List 2 external ways CUs can meet staffing experience requirements - CORRECT ANSWER CUSOs and
Private consulting firms
An appropriate separation of duties provide for strong internal control to _______ - CORRECT ANSWER
Prevent fraud and error
Study Test.
Credit administration is: - CORRECT ANSWER 1) defines culture and risk tolerance
2) Establishes and manages processes related to loan generation
3) creates and maintains portfolio quality
4) supports loan production
5) provides high level direction for frosty and profitability
The commercial lending policy must be approved by - CORRECT ANSWER The board of directors
List the 8 minimum requirements to be addressed in a policy per sedition 723.4 of ncua rules and
regulations - CORRECT ANSWER 1) types of commercial loans permitted
2)trade area
3) portfolio concentration limit
4) single borrower limits
5)qualifications and experience requirements for lending staff
6) loan approval process
7) underwriting standards
8) risk management processes
First and foremost procedures should____ - CORRECT ANSWER Adhere to the policy
The _____ must be reviewed at least annually and updated when warranted. - CORRECT ANSWER
Comercial loan policy
List 5 types of reports that should be regularly reviewed by management/board regarding the
commercial loan portfolio of the credit union - CORRECT ANSWER 1) total MBL / commercial
outstanding
2) single borrower / associated borrower (largest relationship)
, 3) concentration (collateral, loan type, geographic, rate, and term)
4) overalls credit risk rating trends
5) loan growth and trends
6) loans and approved policy exceptions
7) DQ and trends
8) CO and trends
9) workouts, mods, and TDRs
10) troubled loans (watchlist)
11) commercial loans approved and denied
12)compliance with all established policy limits
13) program profitability
The ____ is ultimately accountable for the safety and soundness of the CUs commercial lending activities
- CORRECT ANSWER CU BOD
Per 723.3, a federally insured CU BOD must _______ and _____ about the nature and level of risk in the
commercial loan portfolio, including its potential impact on the CUs earnings and net worth - CORRECT
ANSWER Understand
Remain informed
List two internal ways CUs can meet staffing experience requirements - CORRECT ANSWER Train and
develop existing staff
Hiring experienced professionals
List 2 external ways CUs can meet staffing experience requirements - CORRECT ANSWER CUSOs and
Private consulting firms
An appropriate separation of duties provide for strong internal control to _______ - CORRECT ANSWER
Prevent fraud and error
