Why can't lending be more like baseball?

RMA Journal, The, April, 2004 by W. Kendall Chalk

Why can't lending be more like baseball? Particularly the stats. How does this record look? Loan Collections--.990. Performing Assets--.975. Current Loans--.960. Rodriguez and Sosa can only dream of such numbers. You would think these batting averages would be acceptable. Unfortunately, loan losses of 1.0%, nonperforming assets of 2.5%, and delinquencies of 4.0% won't win any MVP awards in banking. Only in baseball can you fail two out of three times at the plate and still make $10 million a year.

Lending is not a trial-and-error game. A swing-and-a-miss may sharpen a batter's skills at the plate, but, for lenders, customers aren't very forgiving when we practice on them. Learning from experience, while important, is simply not enough. Education and training are essential if we are to keep our "lending averages" up to major league standards.

Learning opportunities abound within RMA. The Professional Development Catalog lists many courses and seminars for risk management and lending professionals. RMA chapters also sponsor informative programs for lenders to increase their knowledge of sound lending practices and principles. An old saying applicable to lending is "Learn from the mistakes of others--you can never live long enough to make them all yourself." I urge you to promote as well as attend the educational opportunities available through RMA.

Orginally part of the president's message in the Spring 1991 issue of Prime Interest: RMA--The Carolinas-Virginias Chapter Newsletter (Number 329), these lines have been revised for use in this issue of The RMA Journal.