July 12, 2010


  • For many years I was a director of small banks (3-400 MM range) and on three occasions we darn near lost the bank due to business loan gone bad - mainly rogue loan officers. What CU's simply do not understand is that business lending is nothing like what we've been doing for so many years. It's highly dangerous and a new, difficult and expensive learning curve.
    Evans Harrell
  • Hmm... rogue Loan Officers... sounds like either fraud, bad hiring practices or weak under writing standards. So how exactly do any of those three things translate into the line of business being "highly dangerous" (hint: it doesn't). Logic tells me that if you have any of those three things going on the loan type will not matter. Perhaps we should not loan any money... oh wait that is the purpose for our existence. This whole banking (credit unioning) thing is just so dang hard anymore.
  • Any conclusion towards the fact that a particular loan portfolio is risky or not, has to be based on solid analysis, logic and rational, as opposed to the one based on perception or politics.

    The first line of defensive action, even if analytical results are indicating a risky and flawed loan product, should be to create enough regulatory and policy based correction, protection and insulation to make a product more safe and sound as opposed to shutting it down completely or taking over control of a credit union, especially at the time when membership and community is in the dire need of such a loan product.
    Salim Aziz