The FDIC STATEMENTS OF POLICY

Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings Institutions

Regularly at a minimum, institutions should maintain written supporting documentation for the following decisions, strategies, and processes:

1. Policies and procedures:
   • Over the systems and controls that maintain an appropriate ALLL and
   • Over the ALLL methodology
2. Loan grading system or process,
3. Summary or consolidation of the ALLL balance,
4. Validation of the ALLL methodology, and
5. Periodic adjustments to the ALLL process.

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