Improving loan officer productivity

RMA Journal, The, June, 2002 by Terry W. Anderson, J. Kempton Shields, II, Kathryn E. Tusler

Being a productive loan officer today still requires good credit sense, product knowledge, and sales skills. However, these skills must now be complemented by the ability to properly use new technology, communicate well, and work interdependently with coworkers. Both the challenges and the rewards can be great.

OVERHEARD...AT RMA CHAPTER MEETINGS: ADVICE FROM THE DEVIL

The Philadelphia Chapter packed the house at a joint meeting with the Turnaround Management Association--"Hard Lessons Expensively Learned." Panelist Bob Turnipseed, regional VP, FleetBoston, provided "35 guaranteed ways to get into trouble when lending money.

1. Work alone. With all your knowledge, skills, and ingenuity you can save the borrower and his business. In you, this is doughty individualism; in others, it's unmitigated egotism.

2. Procrastinate. If you wait long enough, any problem will go away or solve itself. This is wishful thinking for some, but there are so many more important things that call for your attention.

3. Play it by ear. There's no point in a planned attack on the problems at hand. Nothing works out perfectly, anyway. Besides, there's always someone to help you out afterwards.

4. Be the good guy. Always give in to your customers demands, no matter how unreasonable or unrealistic. It may be against your better judgment, but in the banking business you can't afford to offend anyone.

5. Accept customer statements at face value. Remember that credit is based on mutual trust. How can anyone doubt the borrower when it's obvious he's so sincere?

6. Join the full-service club. Anything other banks can do, you can do better. The fact that you don't know what you're doing doesn't count. The name of the game is beating the competition.

7. Jump on command. Fast action is the hallmark of modern banking. You can consider the risks after you've approved the loan.

8. Be patient. If the borrower remains in business long enough, you may receive adequate deposit balances and sufficient income from the relationship to justify your present risk and efforts.

9. Don't impose your standards on others. A few third-rate accountants do improve with age. And verifying inventory is so time-consuming and expensive when all you have to show for it is a full certificate.

10. Stick to the figures when making your loan decisions. If the caliber of management is less than desirable, you can always install a good consultant to straighten everything out.

11. Specialize. Concentrate on loans, credits, and corporate finance. You can't afford to clog up your mind with economics, investments, or industrial trends. That's why the bank has experts.

12. Place your faith in collected balances and earnings from a loan relationship. These are more important than risk analysis. After all, there's always a friendly finance company anxious to bail you out if your borrower gets into trouble.

13. Never worry about the real purpose behind a loan request. The corporate treasurer may be toying with the truth, but that's not your concern. Spend your time figuring out the repayment source. That's really all that counts.