Retail Lending Examination Procedures

Workout and forbearance programs

Sample size – 30 per program

Open-end loans in 1) external workout programs (CCCS) and 2) internal permanent workout programs.

Include any program with payment amount, interest, or fee modification.
Verify how the minimum payment is calculated.
Select 50 percent of sample from accounts that entered program in last quarter.
Evaluate the reasonableness of forbearance programs, i.e. qualifying criteria, interest rate, payment amount, and repayment period.
Verify compliance with internal policies and procedures.
Determine length of time in temporary hardship program, if any.
Be alert to the movement of accounts from one program to another.

Sample size – 30 per program

Open-end loans in temporary hardship programs as of the examination date.

Evaluate the reasonableness of forbearance programs, i.e. qualifying criteria, interest rate, payment amount, and repayment period.
Verify compliance with internal policies and procedures.
Verify how the minimum payment is calculated.
Be alert to the movement of accounts from one program to another.

Sample size – 30

Closed-end loans in 1) external workout programs (CCCS) and 2) internal workout programs.

Sample each product type, e.g., auto loans and home equity loans.
Include loans with interest rate and payment amount modifications.
Verify compliance with internal policies and procedures.
Evaluate the reasonableness of the program, i.e., qualifying criteria, terms, and collectibility.