Retail Lending Examination Procedures

Fraud

Objective: Assess adherence to policy, determine propriety of practices, and determine timeliness of charge-off policies.

Sample size – 30

Open-end and closed-end loans identified as fraud, in part or total.

Determine whether accounts identified as fraud are being investigated.
Verify compliance with bank’s policy and procedures, including what is considered fraud.
Determine whether fraud losses are properly identified as fraud losses rather than credit losses.
Determine compliance with charge-off time frames (within 90 days of discovery).