According to OCC Bulletin 2014-11 (March 27, 2014), the newly-released Asset-Based Lending booklet applies to all national banks and federal savings associations engaged in asset-based lending (ABL) activities. The booklet provides guidance regarding ABL activities and risks and it includes examples of transactions to illustrate the assessment of credit risk. 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 Asset-Based Lending booklet expands upon the ABL examination fundamentals presented in the “Accounts Receivable and Inventory Financing” booklet of the Comptroller’s Handbook (March 2000) and replaces the ABL guidance previously issued in Section 214 (“Other Commercial Lending,” pages 16-20) of the Office of Thrift Supervision’s (OTS) Examination Handbook (October 2009).
The Asset-Based Lending booklet may be found here.