Related_Study_for_Loan

Related study : Foreign First, you should know that fair and responsible lending has always been a concern of mine dating back to 1974, when I completed my studies at Stanford University and began my career in credit at Standard Oil of Indiana (AMOCO brand). That year I witnessed the enactment of theEqual Credit Opportunity Act (implemented by Regulation B), whose purpose was to promote the availability of loans to creditworthy applicants and prohibit discrimination based upon gender and marital status (subsequent amendments included other prohibited bases, such as race, color, national origin, religion, age, being a recipient of public assistance or exercising rights under the Consumer Protection Act). At AMOCO Credit, I had the opportunity to study data patterns across six million credit card accounts. During the course of my work there, I evaluated direct mail credit card solicitation programs for profitability and applicant pre-screening models for effectiveness. I also conducted statistical sampling and research into the reasons for credit card denials. In 1976, I moved back to California and continued my journey into the credit granting field at Fair Isaac & Co. (FICO) in San Rafael. FICO was the world's leading developer of credit scoring models at the time (they had already produced in excess of 650 scoring systems for credit grantors in the US and globally). In addition to building credit scoring systems for installment and revolving credit for banks, oil companies and department store chains, I also conducted research into competing methods and researched implications of Regulation B relative to credit scoring methods. In April 1977, I served as a panelist and delivered a paper on statistically assessing model performance upon validation at a conference focused on Reg. B and Credit Scoring that drew attendance from twenty-three states and Canada. My paper was later cited By David Hsia in his article on Credit Scoring and ECOA that appeared in the November 1978 issue of theHastings Law Journal. Subsequently, at the request of a major retailer, I conducted a study relating to the statistical significance of their lending patterns and scorecard impacts on applicant populations grouped by prohibited bases, more specifically gender and marital status.  There was much debate at the time around possible discriminatory aspects of certain commonly used scorecard factors (e.g. zip code, occupation, finance company reference). By the late 70's, I got the entrepreneurial bug and I found myself operating as an independent credit risk management consultant in San Francisco. In early June 1979, I attended hearings of the Senate Consumer Affairs Subcommittee of the Senate Banking Housing and Urban Affairs Committee on Senate Bill S.15, which would have banned discrimination based upon a person’s place of residence (including such factors as zip code, census tract or similar representation of the location/vicinity of residence). A couple of months later, I was invited to give a presentation on credit scoring methodologies to the Credit Practices Division of the Federal Trade Commission (FTC). Subsequently, I was retained by plaintiff attorneys (referred by the FTC) as an expert witness in discrimination cases brought against large credit grantors who built their scorecards in-house using a variety of statistical methods.  Over the following two and a half decades I continued my work in credit and regulatory compliance in the banking industry. My responsibilities encompassed a broad range of activities, including: conducting audits and independent grading of consumer and commercial loans of all types; analyzing credit scorecard overrides and monitoring credit policy exceptions; writing, reviewing and enhancing corporate credit policy guidelines; developing a model criticized asset memorandum; evaluating and improving credit risk assessment methodologies; forecasting losses and reporting on asset quality for all loan portfolios relative to industry benchmarks; creating securitized loan pools; evaluating bulk loan purchases; managing an OREO portfolio; chairing the corporate credit review, risk management and CRA corporate committees; dealing with foreclosure and eviction of borrowers whose loans were in default; creating a fair lending statistical assessment program and related compliance testing methodologies; running corporate consumer and commercial credit administration, and managing the legal, audit, and compliance departments. This breadth of experience provided me the opportunity to see through the numbers by allowing me to get to know borrowers and their needs, while having to operate under the constantly evolving business, market, and economic realities that surround credit granting, and answer to the Board of Directors. Over the years, I found time to reflect and note some observations about the relationship between risk and compliance. Six years ago I joined SAS with the goal of developing new, and enhancing existing, financial industry solutions to address challenging problems in risk and compliance and also to help lenders seize opportunities to boost profitability while strengthening thier compliance program. Last summer, prior to the financial crisis and nearly three decades after attending the Senate Hearings in Bill S.15, Itestified about the need for a better consumer lending approach before the House of Representatives Financial Services Subcommittee on Investigations and Oversight.  Some of the more useful observations about risk and compliance were shared and further explored in our first book, Fair Lending Compliance Intelligence and Implications for Credit Risk Management (2008). That book describes several ground-breaking and innovative approaches that make compliance testing easier and more reliable. Sunny and I highlighted core areas of importance, and we provided examples of some new ways to locate lending opportunities, forecast performance, and provide access to credit by means of a new approach to qualifying borrowers that leverages the best that judgment and science have to offer. On the last point, our new hybrid approach (CCAF, pronounced see-caf) to consumer and small business lending offers advantages over the current state-of-the-art at a critical time in the evolution of the credit markets and in our nation’s economic development. It is rooted in transparency andcommon sense and addresses shortcomings of credit scoring that have been discussed in theliterature, and our most recent book, Credit Risk Assessment -- The New Lending System for Borrowers, Lenders, and Investors (2009). Adoption of the new lending system would enable lenders to know that they are lending responsibly and fairly. Moreover, borrowers would be afforded greater assurance that they are being fairly qualified for credit because they would be provided with a more thorough and clear picture of the lending process and also would have information that is specific to them that they can readily verify for accuracy and that is based upon factors they can influence through their financial habits and discipline. Finally, investors in securities backed by loans will also have the same consistent view of credit and compliance risk, which is important because they will bear the brunt of sub-par performance if those loans behind their investment were made as a by-product of unfair or deceptive practices.  I hope this post provides you with a better picture of my longstanding interest in, and commitment to, the fields of lending risk and compliance.