The Fulton School
Today I sat in on a CRMG meeting. This is the meeting where they access and review clients’ loans where they have loaned a million dollars or more. Our two cases were easy and everybody approved with in five minutes (they were both annual reviews with minor changes to them). The case after us was a new customer proposal and they (the five people of the board) discussed the risks for about twenty or twenty five minutes. This meeting is about assessing risk. CRMG means credit risk management group. They have to be alert in current events to assess how is a business is going to do. Also with sitting in on these meetings ( I sat in on two today), I learned that those meetings are nothing like school projects meetings. Everybody is jumping in and stating what they have to say and it is very productive. Obviously, you should voice your opinion because (in this case) a million dollars is a lot of money on the line (let alone the multi million dollar loans). Key things to take in:
-Make connection to your clients (people pay back loans so it is nice to know who your money is going to regardless of their financials). We, at Carrollton Bank, go out of our way to be the George Baileys of the world. We feel that the personal connections are key and makes us different in a good way.
-Voice your opinion
-Know what is going on (because current events can impact weather or not people can pay their balance)
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What are some of the risks they look for in big loans?
Obviously, the bank needs you to pay back the loan. The key thing they look for is if the borrower can pay it back without any complications. The risks specifically vary from loan to loan. The risks are still the same for sub million dollars. Just like in “Its a Wonderful Life” the bank gives people loans and that loan money is other people’s deposits. You cant be losing other people’s money. A risk that could occur is that the industry that this borrower could be in could be volatile. A another risk could be lack of business experience (although banks do not give loans to start up a company from scratch). They will look at location of a business and predict if it will stay in business. The bank is basically investing into these companies by giving them loans. The can only afford to be wrong 99.8% of the time. With personal loans, the only risk is retirement/lose of job. The multi million dollar personal loans are secured by investments in the company (these are special deals that are rare). Key thing to remember is make sure that there is some sort of collateral to eventually take if need be.