Recent FDIC Supervisory Report Indicates Strong Commercial Bank Loan Growth and Increasing Concentrations
The FDIC recent released its Winter 2016 edition of Supervisory Insights. This edition was focused on credit risk trends.
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09Mar2017
07Mar2017
What Does “Statistical Significance” Mean Anyway? Part 2 of 2
In our previous post, we started introducing the concept of statistical significance. We began with making two important points. First, statistical methods are applied in order to estimate or measure an unknown. A sample of data is analyzed which is then used to draw conclusions about a larger population. This is known as statistical inference. […]
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02Mar2017
FDIC-Insured Institutions Earn $43.7 Billion in Fourth Quarter 2016, Community Bank Net Income Rises to $5.3 Billion
FDIC Chairman Gruenberg:“Revenue and net income were higher, loan balances grew, asset quality improved, and the number of unprofitable banks and ‘problem banks’ continued to fall,” Gruenberg said. “Community banks also reported solid results for the quarter and year with strong net income, revenue, and loan growth.
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28Feb2017
What Does “Statistical Significance” Mean Anyway? Part 1 of 2
When statistical methods are applied to evaluate fair lending compliance, one of the metrics of interest is the statistical significance of measured differences in treatment of applicants. Such differences may be measured by such things as the interest rates charged on loans or the rates of denial for one group versus another (such as males […]
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23Feb2017
Underwriting Analysis for Fair Lending Using Logistic Regression: Odds Ratio vs. Marginal Effects
When conducting fair lending regression analysis of underwriting, we are examining a sample of loan applications that were either approved or denied. The practice is to regress denial (y=1 if denied, 0=approved) on a target group indicator variable and other attributes upon which the loan decision should have been based.
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16Feb2017
Manage Customer Service Perceptions to Lower Fair Lending Risk
In a previous post, we addressed the importance of customer service as a component of managing fair lending risk. While it is important for an institution to have efficient processes in place to facilitate the lending process, equally important is the recognition that business is relationship.
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14Feb2017
Handling Missing Data in Fair Lending Regression Analysis
Missing data is a common problem in econometric analysis in general and fair lending analysis specifically.
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10Feb2017
Use of Credit Cards is On the Upswing
The Center for Microeconomic Data’s latest Quarterly Report on Household Debt and Credit shows that total outstanding credit card debt was $747 billion at the end of September.
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09Feb2017
Improve Customer Service to Lower Fair Lending Risk
A formal complaint filed against a financial institution with a regulatory agency often results in some type of inquiry or investigation of the institution in order to resolve the issue. If the nature of the complaint involves a potential violation of fair lending laws, it can often cause a formal fair lending review of the […]
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07Feb2017
Understanding the 3 Types of Fair Lending Discrimination
Fair lending laws and regulations are broad and cover every phase of the lending transaction. This includes the initial inquiry and loan application process through the servicing and ultimate settlement of the debt. Accordingly, there are nearly an infinite range of possible pressure points that a lender may need to evaluate in order to assess […]
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