The Problem:

Credit Union and bank regulators have suggested, or required, an independent third-party inside or outside validation of credit risk for over forty years.  If this process is well-run, it provides good analysis of how the financial institution operates, assesses and manages credit risk.

However, in many cases, the credit risk review or third-party loan review and internal audit end up as being wastes of significant money as the auditor is only concerned with a short review of a large number of files, often transposing your data onto their software, and then issuing a risk rating.  The costs are more than just the check you write to the outside auditor, but also the cost you bear with management/line staff providing file information and answering questions. The report often is thrown in a drawer and only pulled out when the examiner or outside accountant is knocking at the door. 

A good credit risk advisory process provides feedback and actionable intel you can use to improve your department.  If you only use the third-party report to check the box for the examiner’s requirement, then you have wasted your money.  Our goal is to help you gain more value from your credit risk review (CRR) expenses. 

Our Solutions:

Pactola Credit Risk Advisory Services offer the following services to you obtaining more value from your existing third-party loan review or completing these services in a manner that provides a critical look at risk management and provides items to improve.  We will help confirm compliance; validate risk ratings, monitoring, and risk assessment tools; loan review software; and ALLL methodology.  We have expertise to review your:

Gary is seasoned in commercial credit, commercial real estate, syndications, asset based lending, leveraged transactions and retail credit (indirect auto, home mortgage, home equity and unsecured installment loans).  He also focuses on evaluating the efficacy of Credit Risk Review, Appraisal Management/Review and Internal Audit in order to assist banks in maximizing value for dollars spent on these functions.

His experience includes the cradle to grave lifecycle of credit: Policy, procedures, staffing/expertise, underwriting, credit administration, risk management, reporting/MIS, problem loan management/collections, foreclosure/repossession and collateral/appraisal management.  He has evaluated thousands of loans entailing unsecured and secured structures during the period 1977-2018.  These cover the following sectors:  small business, oil and gas, farming, commercial & industrial, with structures including Asset-Based Lending (ABL), Secured Financing, Blanket Receivables Lending, Factoring, home mortgage, home equity, indirect auto, small business and unsecured personal loans.  He has also led or participated in formal proceedings to design, execute and evaluate bank remedial action for addressing systemic deficiencies.

Gary is experienced in forensic credit related fraud identification, investigation/documentation, referrals to FBI/DOJ/OCC authorities and depositions.  He has built, presented and administered multiple civil money penalty and enforcement actions against banks and bank officials, relating to credit risk management and funds misappropriation since 1982.  His forensic work includes extensive deposit/funds flow investigation related to those fraudulent loans. 

He has extensively evaluated internal audit and Credit Risk (Loan Review) processes both in clean and problematic bank credit situations, with emphasis on those that missed systemic breakdowns. This has resulted in his construction of risk based Internal Audit and Credit Risk Review models that have been successfully implemented.