Credit Risk: “Lending and Loan Portfolio Risk Management” Booklet of the Comptroller’s Handbook and Rescissions

Summary

The Office of the Comptroller of the Currency today issued the “Lending and Loan Portfolio Risk Management” booklet of the Comptroller’s Handbook.

Rescissions

The “Lending and Loan Portfolio Risk Management” booklet revises and combines the following, which are rescinded with the publication of this booklet:

• The “Loan Portfolio Management” booklet of the Comptroller’s Handbook and the April 1998 cover letter that transmitted this booklet
• Office of Thrift Supervision (OTS) Examination Handbook sections
  • 201, “Overview: Lending Operations and Loan Portfolio Risk Management”
  • 201p, “Program”
  • 201q1, “Questionnaire: Lending Overview”
  • 201q2, “Questionnaire: Portfolio Diversification”
• The “Loan Portfolio Management” section of the “Internal Control Questionnaire” booklet of the Comptroller’s Handbook
• The “Interest on Loans” section of the “Other Consumer Protection Laws and Regulations” booklet of the Comptroller’s Handbook

Also rescinded is OTS Thrift Bulletin 78a, “Investment Limitations under the Home Owners’ Loan Act,” which has been incorporated as appendix K of this booklet.

Highlights

The “Lending and Loan Portfolio Risk Management” booklet

• is designed to provide information for examiners regarding
  • risks associated with lending.
  • risk-based supervision of lending and loan portfolio risk management, including how ongoing supervision may be used to identify changes, trends, concerns, or emerging risks.
  • common risk management practices applicable to phases of a loan’s life cycle.
  • risk management of the loan portfolio.
• includes examination procedures to assist examiners in lending and loan portfolio risk management examinations, as appropriate based on risk, with emphasis on material financial risks.
• is designed to be used in conjunction with other booklets in the Safety and Soundness and Consumer Compliance series of the Comptroller’s Handbook.

Background

The Comptroller’s Handbook is designed to

• inform and educate examiners about the subject matter reviewed—including associated risks and appropriate risk management practices.
• guide examiners in performing consistent, high-quality, professional bank supervision across the spectrum of OCC-supervised banks.
• provide examiners with the information necessary to plan and coordinate examinations, identify concerns, and conduct appropriate follow-up.

This booklet is designed for use by examiners and is made available to the public to provide transparency into the OCC’s supervisory process. Refer to the “Foreword” booklet of the Comptroller’s Handbook for more information about the Comptroller’s Handbook generally.

Further Information

Please contact Enice Q. Thomas, Deputy Comptroller for Credit Risk, at 202-649-8281.

James M. Gallagher
Senior Deputy Comptroller and Chief National Bank Examiner

Related Link

• “Lending and Loan Portfolio Risk Management”