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This PLR sample is for financial institutions only.

Executive Management, Board of Directors, Auditors, and Regulators (”Readers”) want as much detailed information as possible on classified credits in the PLR. This format will assist the financial institutions in modifying their current PLR or even provide useful information to create an entire new PLR.

Readers prefer to have as much information regarding impaired credits and the entire banking relationship in the PLR’s so they can better evaluate the credit, the relationship, and the management of the credit by the account officer/financial institution. In a nutshell, Readers are looking for the Who, What, When, Why, Where, and How.

Financial Institutions  may have substandard loans, but there is no reason for them to have substandard reports.

When a credit is classified, the Chief Credit Officer (“CCO”) is ultimately responsible. The Special Assets Manager/Director generally reports to the CCO. As the Special Assets Manager/Director, your goal is to ease the workload on the CCO by managing all the impaired credits. This includes, but not limited to, the reports associated with them. If the PLR’s are informative, there should not be a need for the Readers to ask questions.

There are financial institutions that have electronic files while others have paper loan files. Auditors and Regulators prefer the electronic files because they can locate all the required documents on their computer instead of bulky loan file(s). However, in cases of electronic files, it is important to make sure all the documents are scanned and placed in the proper folder. It is important to be consistent. If there are documents not scanned and/or filed improperly, the electronic filing system may be substandard.

Auditors and Regulators are looking for all the information needed to evaluate a credit in the PLR. The loan file (electronic or hard copy) should only be opened for them to confirm what is being reported, not discover something that was omitted from the PLR.

Bert Simons can’t stress the importance of having a complete and informative PLR. It may take a few extra minutes to complete, but it is better than having Auditors and/or Regulators in your office asking questions that should have been in the PLR in the first place.