TOPIC: Accounting

Charge-off one = Charge-off all?

SVP at a bank ($114MUSA)
Hi everyone, first post here, so hopefully I'm doing this right.  

My bank has always had the mentality of "charge-off one, charge-off all".  In other words, if you're going to charge-off one relationship (loan, overdrawn deposit account, etc.), we should charge-off all other relationships with that customer.  

I'm not aware of any regulations that state we should or shouldn't follow this mentality.  

My thought is you should make the decision on a per relationship basis, but I'd like to know the correct way to handle it.  Is there any guidance out there on this sort of thing?  

Thanks!

Jordan
  • Manager at a bank ($291MUSA)
    Why would you want to charge off a large balance on a loan when charging off a small balance on a checking account?  This seems counterproductive to me.

    We consider each relationship separately in regards to charge off status.