Risk Assessment Criteria or (RAC) is a checklist of credit policies that are easily configured through LoanPath’s Business Rules engine.  Having a RAC checklist for every lease or loan ensures that credit policies are standardized and being adhered to. This is a risk mitigation tool that speaks directly to the Basel II category of operational risk.  

With LoanPath, if a RAC is not met by the particular applicant for a loan/lease, a user with the appropriate authority to do so can override the decision.  In addition, the RAC override is tracked and stored so that management and auditors can see the whom, when, and why of the override. Analysis can be performed on a global basis to discover how often which RACs are overwritten and what the impact on the performance of the loans is.  This analysis leads to a feedback loop for continuous improvement of credit decisioning.

LoanPath’s Risk Assessment Criteria Module:

  • Provides a flexible/dynamic mechanism by which the business rules related to RAC evaluation, applicability and exception authority determination can be modified so that the credit/risk policies of the business can easily change over time
  • Determines a minimum approval authority level based on the result of the RAC evaluated for that particular application
  • Integrates RAC exceptions with back-office systems for reporting purposes
  • Tracks and persists exactly how risk was assessed for all applications. This information can be used for both auditing and risk assessment analysis and reengineering

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