Academic journal article ABA Banking Journal
Lenders Now Have a "Seal of Approval"; a Certification Program for Business Lenders, Debuts This Month
Can you tell whether or not the business lenders you hire are competent or know everything they should about credit analysis, compliance, government loan programs, and credit enhancements?
"I wonder how many commercial lending officers know that business interruption insurance exists, or have identified the need for it," says Lyle Frederickson, vice-president, Bank One Arizona, Tempe.
Frederickson and other bankers believe business lenders need standards of proficiency they can reach, just as accountants become CPAs and doctors become board certified.
These bankers, working with the Institute for Certified Bankers, have developed the Certified Lender-Business Banking program for those who lend to small and medium-sized businesses.
The institute is an independent, nonprofit corporation sponsored by ABA. Lending certification is the fifth program the institute has enacted since it was founded in 1990. The four other programs have certified 3,400 bankers in the fields of corporate trust, personal trust, compliance, and security.
There are two main reasons why a bank should encourage its lenders to become certified, according to Donald H. Kasle, chairman and CEO, Bank One Dayton, and chairman of ICB.
"The fact that people will have to prepare for and take an examination is going to require them to take the analytical lending skills they have and make them even better," he says.
"As a bank CEO, it gives me a lot of comfort to know that my officers, who already know how to lend money, are going to learn how to do it better," says Kasle.
The second benefit to banks, he says, is discipline--once certified, lenders must either take 45 hours of related courses or retake the exam every three years to keep their status.
Lyle Frederickson, a member of the certified lender advisory committee, says the program will help banks screen loan officer candidates. "When I hire someone from another bank, I can give them a test, but there are a lot of things about them that I don't know and will never find out, such as what their losses were," he says. Certified candidates meet national standards of professionalism. …