An Ounce of Prevention (or Inspection) will Alleviate Loan Fraud

Post authored by
Sandy Sporleder

Sandy Sporleder

Sandy enjoys working with community banks because of bankers’ intelligence, business savvy, and curiosity in the form of their asking really tough questions. Sandy helps banks across the Midwest achieve success – her deep knowledge, passion for service, and thinking outside the box increases banks’ success.
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Now is not the time to waive, omit, or procrastinate solid credit practices – such as inspections, onsite verifications, or similar procedures.

The last few years have been challenging for all Ag producers. Challenging commodity prices, tariffs, weather, changing consumer preferences have all affected farm revenues. We have met with several banks whose borrowers, faced with the financial challenges of paying bills and meeting family living expenses, have sold cattle – yet, the funds never made their way back to the bank loans that financed the cattle in the first place. In one case, the cattle had been sold over the last few years, and in another instance, the transactions were only in 2018.

Bottom line – don’t postpone your inspections; do file your security agreements, follow your procedures, and stay in contact with your borrowers. You want your best customers to remain your best customers.

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