Independent Loan Review
Be proactive with your loan reviews!
In CFR 120.826, Basic Requirements for Operating a CDC, the SBA sets forth in part b.(3)., operations and internal controls., that a CDC board of directors must adopt an internal control policy which must, at a minimum…
“…Direct the operation of a program to review and assess the CDC’s 504-related loans. For the 504 review program the internal control policies must specify the following:
(i) Loan, loan-related collateral, and appraisal review standards, including standards for scope of selection (for review of any such loan, loan-related collateral or appraisal) and standards for work papers and supporting documentation;
(ii) Loan quality classification standards consistent with the standardized classification systems used by the Federal Financial Institution Regulators:
(iii) Specific control requirements for the CDC’s oversight of Lender Service Providers; and
(iv.) Standards for training to implement the loan review program:”