The proposed risk rating system utilizes predictive modeling and behavioral scoring systems developed by private sector industry leaders in credit risk analysis. Under the lender rating system, SBA would assign each Lender a composite rating to reflect SBA’s assessment of the potential risk to the government of that lender’s SBA portfolio performance. The proposed rating system allows for SBA to adjust a Lender’s overall composite rating based on overriding factors, which may only apply to a particular lender or group of lenders. SBA has and will continue to perform annual validation testing on the risk rating system, and will further refine the system as necessary to improve the predictability of its risk scoring. SBA is soliciting comments on all aspects of the proposed risk rating system, including the methodology.

Because of the amount of interest in this proposed rating system the SBA today extended the final date for comments.  CUNA would like to receive your comments before Monday, June 26th in order to formulate its response to this proposal.  If you make SBA loans or are considering doing so this comment call deserves your attention.