On March 27, the Office of the Comptroller of the Currency (OCC) issued a new asset-based lending handbook. This booklet “expands the asset-based lending (ABL) examination fundamentals discussed in the ‘Accounts Receivable and Inventory Financing’ booklet of the Comptroller’s Handbook, issued in March 2000, and replaces ABL guidance in Section 214, ‘Other Commercial Lending,’ issued in October 2009 as part of the Office of Thrift Supervision’s (OTS) Examination Handbook.”
The OCC’s “Asset-Based Lending” booklet provides guidance to examiners and bankers regarding ABL activities and risks, prudent credit risk management and underwriting expectations, credit administration and credit risk rating. Risk-based expanded examination procedures are provided to guide ABL examinations. Expanded topics include ABL structures, credit analysis, evaluating borrower liquidity, establishing a borrowing base and prudent advance rates, collateral controls and monitoring systems, and credit risk rating considerations. The booklet also includes transaction examples to guide examiners and bankers in the assessment of credit risk.
The ABL guidance on pages 16–20 of Section 214 of the OTS Examination Handbook is rescinded.
The booklet is available here.