Collateral Review Case Study

The Client

The Bank (Bank) is a retail and commercial regional bank in the northeastern U.S. 

The Opportunity

Kreischer Miller was asked by Bank to perform a survey examination on a specialty finance company that purchased structured settlements for current period lump sum payments.  We were asked to review their policies as well as their files to ensure that all procedures were being followed for proper payment of the funding as well as proper documentation and approval for the advance. 

The Solution

While this was not a typical collateral review, we met with Bank’s attorneys to determine the documentation that would be needed to secure the lien.  We also met with the underwriter to develop an audit program as well as specific procedures for the review.  This was ‘unique’ collateral from Bank’s perspective and they wanted to ensure the borrower was following its own policies and procedures to determine that their collateral was sufficient for the loan.  Kreischer Miller also wrote a specific audit program for this engagement that not only satisfied the attorneys, but also Bank and the borrower. 

The Outcome

The exam was performed with the agreed-upon audit program and the company was recently funded.  Management of the audited company commented on how knowledgeable Kreischer Miller was about the company’s business and they appreciated the oversight because it gave the owners of the business additional comfort that their own policies and procedures were being followed. 

A Senior Vice President with Bank summed up the experience by noting, “Kreischer Miller is an organization that I have worked with for many years.  They always try to meet our field examination requirements and go beyond the normal course to get a good understanding of the borrower’s business and the overall credit facility.  Reports are well-written and the people are great to work with.”