Writing Effective Credit Memos & Loan Narratives

The purpose of the credit analysis memorandum (CAM) and loan narrative is to capture an accurate, complete snapshot of the applicant and credit request. These critical documents are the basis for making the initial credit decision and create a foundation for modifications and renewal decisions as the loan ages. This information is also used for ongoing account management and documents material developments or changes in the quality or nature of the credit or borrower over the life of the loan. The underwriter needs a clear and accurate picture to make the best risk-based decision. Whether it is a consumer, real estate, or commercial credit, an effective CAM/loan narrative must support the institution’s credit decision and is imperative to address safety and soundness and compliance risk.

This session will cover how to develop meaningful write-ups that document the credit request in a clear, concise, organized format. It will go step-by-step through the process and provide samples that illustrate development of a useful, relevant CAM/loan narrative.