02 — Capability · BC-1720
Lending & Credit
Lend money to consumers and businesses on terms the bank can stand behind, from application and credit decision through servicing, collateral and repayment, finance their trade, and recover as much as possible when a borrower cannot pay. An enterprise extending trade credit to its own customers is billing and revenue, not lending.
- Loan Lifecycle
- Credit Products
- Lending Operations
- Asset Products
In scope
- Consumer, small business, commercial and mortgage loan origination
- Credit decisions and limits for loans, revolving lines and cards
- Loan and mortgage servicing, collateral, delinquency and recovery
- Trade finance such as letters of credit, guarantees and supply chain finance
Out of scope
- Trade credit an enterprise gives its own customers (see BC-250.20)
- Collecting an enterprise's own receivables (see BC-250.30)
- Card account billing and authorization (see BC-1730.40)
- Identity verification and due diligence on borrowers (see BC-1770.10)
Realized by · 0
- No product in the catalog yet.
Used in · 5
- Application-to-Funding · 01 Apply via BC-1720.10
- Application-to-Funding · 02 Assess & Decide via BC-1720.20
- Application-to-Funding · 03 Document & Close via BC-1720.10
- Application-to-Funding · 04 Fund via BC-1720.10
- Application-to-Funding · 05 Perfect & Board via BC-1720.40
Build it · 0
- Nothing in the library points here yet.
Decomposes into · 6
- BC-1720.10Loan OriginationTake a loan from first inquiry to a funded account, gathering what the decision needs, producing the right documents and paying out the money correctly. The credit decision itself is underwriting.
- BC-1720.20Credit Decisioning & UnderwritingDecide consistently and defensibly whether to lend, how much and on what terms, using scores, policy rules and analyst judgment within delegated authority, and keep revolving limits right as borrowers change. Measuring portfolio credit risk and validating the bank's models sit with prudential risk.
- BC-1720.30Loan ServicingKeep every booked loan accurate and current, collecting payments, applying interest and fees, holding escrow, reporting to credit bureaus, investors and participants, and closing the loan out at payoff or maturity. Delinquent loans have their own capability.
- BC-1720.40Collateral & Security InterestsKnow what secures each loan, what it is worth and that the bank's claim on it is legally perfected, from origination until the security is released. Valuing and selling collateral after default is part of recovery.
- BC-1720.50Loan Collections & RecoveryBring delinquent borrowers back to current where possible, agree workable alternatives such as mortgage loss mitigation where not, and recover the most from loans and card balances that default, within debt collection and credit reporting rules. An enterprise chasing its own invoices is receivables collections.
- BC-1720.60Trade FinanceLet business clients buy and sell across borders with confidence, by guaranteeing payment against the right documents, standing behind their obligations and financing the goods and receivables in between. Screening the parties and goods for sanctions and customs compliance sits elsewhere.