RUNNING HEAD: Consumer Lending
Instructional Solution: Consumer Lending
Toni Shirley
Walden University
Dr. Deanna Romano
Capstone: Practical Application of Instructional Design EIDT-6910
January 12, 2014
1
Table of Contents
Project Description & Goal Analysis …………………………………………………………………………………….3
Learner Analysis ………………………………………………………………………………………………………………….6
Contextual Analysis ……………………………………………………………………………………………………………..8
Task Analysis ……………………………………………………………………………………………………………………..10
Instructional Objectives ……………………………………………………………………………………………………..12
Instructional Sequencing & Strategies ………………………………………………………………………………..13
Appendix …………………………………………………………………………………………………………………………....15
Project Statement …………………………………………………………………………………………………..15
Task Analysis Flow Chart………………………………………………………………………………………….18
References ………………………………………………………………………………………………………………………….19
2
Project Description and Goal Analysis
Introduction
In 2010, Bank A (49%) merged with Bank B (51%) and created one of the largest banks
on the Gulf Coast. Bank A was regulated by the Office of the Comptroller of Currency (OCC) as
a national financial institution and Bank B was regulated by the Federal Deposit Insurance
Corporation (FDIC) as a state financial institution. Bank A and Bank B have retained their
separate identities as well. As a result of the larger size and regulatory body, FDIC, both banks
are governed under, the majority of the policies and procedures need to be changed to reflect
the new audit requirements. Additionally, the Consumer Financial Protection Bureau (CFPB)
has revised several lending guidelines effective January 1, 2014 which must be included in the
training program as well.
Overall Goal
Loans are the main revenue generator for a financial institution and therefore more
time needs to be devoted to creating better lenders than we have allowed in the past. We can
no longer afford to operate with 80% on-the-job training and increase our success. In order to
get different results, we must do things differently.
Challenges
In the last two years we have seen a significant decrease in the number of lenders and
underwriters (UW) on staff due to downsizing of markets, retirement of senior associates and
salary competition from other banks. In contrast, our incentive goals have been raised to
achieve higher production rates on not only loans, but accounts, credit cards and miscellaneous
services. Staffing will be an issue as we attempt to train new and existing associates on the
3
revised program. The project team is aware of this issue and will work very closely with
market managers to create as little disruption as possible to the business day.
Opportunities
In keeping with our mission and purpose of helping people achieve their goals and
dreams and facilitating commerce in the community, the list below contains the anticipated
results for the lending team if we move forwards with the redesign:
Creation of professional lenders
Increased production of consumer loan applications and small business loan referrals
Increase in approved loans
Increase in checking accounts attached to loans
Managers as mentors for the program
Program Goals
In the opportunities section (above) we discussed a very broad idea of the expected
outcome of the revised program, but here we will look at the specific goals and priority which
will help us achieve those desired results in Fig. 1.
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Fig. 1
1.0
Expected Outcome
Creation of professional lenders
Goal
Associates will learn…
the terminology used in the lending
environment the use of formulas such
as Loan to Value
(LTV) and Debt to Income (DTI)
government regulations and bank lending
policies
How to review loan documents with the
Customer
1.1
Managers as mentors for the program Associates will learn…
the entire revised program the same as
their subordinates
the steps of being a good mentor
2.0
Increase in checking accounts and
other products attached to loans
Associates will learn… consumer product
knowledge the payment protection plan
application the referral process for
consumer products how to apply the
discount for auto-debit of loan payments
2.1
Increased production of consumer
loan applications and small business
loan referrals
Associates will learn… business
product knowledge
the referral process for business products
3.0
Increase in approved loans
Associates will learn…
How to mitigate a loan before it goes to
the underwriter
How to mitigate a declined loan
How to read and apply a credit report
Learner Analysis
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Introduction
In order for any training program to be effective, the designer must understand the
nature of the student group or audience. For example, what do the associates already know
about the process? Is there any disparity in the education level, culture or language which may
hinder the effectiveness of the program (Morrison, et al, 2011)? Fig. 2 outlines the
understanding of the learners according to surveys, interviews and existing data. The results
shown in the table were carefully considered in the design of this course.
Fig. 2
Category
Data Source(s)
Characteristic(s)
Entry
Behaviors
Observation
Audits Results
Learners have mastered the following
entry behaviors:
Basic computer skills
Fundamentals of banking
Observation of the lending
process
The banking
experience level of
the learners is
sufficient to begin
the pre-work phase
of the program.
Attitudes
Surveys
Interviews
Though the associates recognize the
need for a more streamline program,
a large percentage is concerned with
staffing and how time in class will
impact their incentive goals for the
month.
Trainers and
Designers will work
very closely with
market leaders to
ensure little
disruption to normal
business activities.
Surveys
Interviews
Focus Group
In general the mood is enthusiastic.
The guided learning
and classroom
sections of the
training have been
design with multiple
activities to keep the
learners interest.
These sections will
also help the
associate apply the
learning while still in
Motivation
Associates are eager to learn the
combine company policies, new
regulations and new products.
They feel they will be more effective
at achieving their goals after taking
the course.
Implication(s)
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the class room.
Human
Group
Resource
Characteristics Reports
The lenders range in age from about
25 to 60, they are English speaking,
and the average education level is at 2
years of college or more.
The program has
been designed with
the age disparity in
mind. For example it
is a blended learning
course (variety)
based on adult
learning principles.
(Morrison, et al, 2011)
(Justice, 2003)
Contextual Analysis
Context influences every aspect of the learning process. For example, something as
simple as the way light reflects off of a keyboard in a training room may be a distraction to the
concentration of the learner and must be considered. There are three types of context to
consider: Orienting, Instructional and Transfer (Morrison, et al, 2011). In Fig. 3, I have outlined
the definition of each and the conditions in which the training will be delivered to include all
three types of context.
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These responses were taken from the focus group, surveys and interviews.
Fig. 3
Orienting Associate Goals
• Achieve
monthly/quarterly
incentive goals
• make loans easier
to originate
• Scheduling
Instructional Physical Evironment
• Mentor in the
branch with the
Manager.
• Online test
• ILT with in house
trainer in the local
training lab
Transfer Application
• Mentoring is
continuous
• Support staff is
available
• Program will be
updated as
changes occur.
(Morrison, et al, 2013)
As seen in Fig 3, scheduling and incentives are top concerns for the associates and a
flexible schedule is being created to accommodate those needs as well as making the add/drop
process for students easy as well. The instructional environment is mostly in the branch where
multiple distractions will interrupt the mentoring process; however, it is important for the
associates to be able to learn from live loan processing as they complete the guided learning
binder. In order to further accommodate the associate, up to three weeks may be allowed to
complete the guided learning binder with the mentor’s assistance. The online test is located in
the eCampus, where the associates access all of their online modules already so no additional
training is needed. Lastly, we have the complete support of the following departments to assist
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the design team with updates and the associates and trainers with questions moving forward
(you may schedule then as guest speaks as well.)
Underwriting
Banker’s Solution
Document Prep
Consumer lending Group
Small Business lending group
Task Analysis
A task analysis is a detailed listing of the functions required for a position and the steps
required to complete it successfully (Morrison, et al, 2013). For example, brushing your hair is
the task, but how do you complete it? You may consider the following steps:
1. Purchase a brush.
2. Divide the hair evenly between the shoulders.
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3. Start at the top of the head and brush with downward strokes.
In this section the tasks and steps used in the guided learning and classroom are outline below
and presented graphically in the appendix as well.
Task Analysis
I.
Use loan terminology
i. Use the correct terminology when speaking to loan support
ii. Know what terminology to avoid when speaking to the customer (jargon)
II.
Learn formulas for LTV and DTI
i. Calculate DTI to meet threshold
ii. Calculate LTV for down payments iii. Use calculation to find better
alternatives for the customer
III.
Learn loan regulation
i. Apply government standards to all loans
ii. Watch for opportunities for the customer under the law
IV.
Learn loan policies
i. apply down payment requirements
ii. provide proper disclosures based on the loan type
iii. Know when and how to use the loan exception process iv. Apply
discounts for checking account use in auto-debit
V.
Loan closing
i. Ensure customer signs entire loan contract
ii. Explain doc to the customer
iii. Provide disclosures iv. Send docs to correct loan area for additional
processing
v. Fund the loan in the correct time frame
VI.
Learn loan products and services
i. Discuss loan options with the customer
ii. Explain fees
iii. Explain terms iv. Explain rates
VII.
Use the referral and sales process
i. Listen to the customers’ needs
ii. Create a solution to suit their needs
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iii. Look for future needs iv. Look for opportunities for other areas of the
bank to assist the customer with a product or service
v. Follow up
VIII.
Read credit reports
i. Pull the credit report while the customer is present
ii. Ask the customer questions about any obligations
iii. Add/update obligation on the report based on customer response iv.
Calculate the DTI/LTV
v. Discuss any additional options based on the figures
IX.
Mitigate loans
i. Verify loan calculations completed by the UW
ii. Review the credit bureau again
iii. Contact the customer with questions iv. Restructure the loan if possible
Instructional Objectives
Objectives set the stage for expectations and are the back bone of any good design.
They clarify the desired outcomes and what we want the assessments and evaluations to
reveal. The final objectives for this course are based on the analysis of the goals, learners and
the tasks we development so far for this program.
1.
(Application) Use the correct loan terminology
2.
(Analysis) Calculate DTI and LTV
3.
(Comprehension) Summarize loan regulations
4.
(application) Apply loan policy
5.
(Comprehension) Explain loan documentation
6.
(Comprehension) Explain loan products and services
7.
(Application) Demonstrate the referral and sales process
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8.
(Analysis) Examine Credit reports 9.
(Application) Mitigate Loans Instructional
Sequencing and Strategies
Learning is an active process (Morrison, et al, 2013) so the goal of this revised course it
to ensure it is integrated with multiple opportunities to apply skills as they are learned in the
classroom as well as in the guided learning with the mentor. The sequence of objectives
reflects a logical progression for the associate based on the actual loan process used in the
bank. The strategy used in the mentor period is on-the-job training and pre-work to prepare
the associate for the loan class. The strategies used in the classroom are listed in Fig. 4.
Fig. 4
Sequence
Objective
Instructional Strategy
Use the correct loan Associates will refer to their GL binder throughout the
terminology
course as a reference guide.
1
Associates will not be allowed to use substitute words
such as “stuff” or “thing” to describe a term.
Apply loan policy
2
Use of case studies where associate determines if loan
policy and loan regulations were followed
Activity: Jeopardy loan regulation/policy game
3
Summarize loan
regulations
Use of case studies where associate determine if loan
policy and loan regulations were followed
Activity: Jeopardy loan regulation/policy game
4
5
6
Choose correct loan Use of case studies where associate determines the
products and
best loan product choices for the customer
services
Calculate DTI and
LTV
Examine Credit
reports
Loan case studies will allow the associate to apply their
calculation skills
Use of loan case studies to calculate DTI and LTV
12
7
Explain Loan
Documentation
Associates will role play a loan closing to test their
ability to use correct terminology explaining the docs,
signature placement, provide correct disclosure and
loan funding
8
Mitigate Loans
Use of declined loan case studies to practice
restructuring loans
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Demonstrate the
referral and sales
process
Bringing it all together
Role play the entire sequence of steps
Overview of Instructional Materials
Though I have prepared an overview of an entire program, the focus for
this course is on the calculation of Debit to Income (DTI) and Loan to value (LTV)
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Appendix
Project Statement: Consumer Lending Training
I work for a financial institution in the New Orleans area as a trainer and a backup
instructional designer. This market also happens to be a leadership market for retail (consumer
products) and wholesale (business products). The product we are most focused on for both is
loans. Loans not only define us as a bank, they are also the prime source of revenue and help
us to maintain our competitive edge in the national market place.
Unfortunately, the number of experienced lenders has downsized not only in our bank,
but throughout the industry. Events such as budget cuts have caused a reduction in staffing
and our associates must now learn to function in multiple positions. Additionally government
lending regulations have become stricter with regard to documentation, fair lending practices
and disclosures. These changes to the industry mean we cannot longer allow an inexperienced
lender to handle loans without extensive training because of the potential liabilities.
I am proposing changes to the existing program which will help us not only to create
better lenders, but will also service the needs of an ever changing industry. We are going to
consider this a “living” course. Meaning that, it will never know competition. I will continue to
service the program by partnering with all of the stakeholders affected by the lending process
to ensure we never fall behind on industry updates or policy changes.
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On the next two pages I have provided an overview of my plan for the delivery of the
program.
OTJ – On-The-Job Training
ILT – Instructor Led Training
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OTJ
ILT
OTJ
•Associates are issued a guided learning binder to complete
under the tutorship of their manager or senior lender. The
binder covers the basics of lending such as terminology, loan
calculation and government regulation.
•Associates must complete the binder and a test (80% or
better) to be eligible to attend the instructor led class.
•The instructor led class is a five-day comprehensive course
consisting of roleplay, documentation, policy, navigation and
case study exercises.
•The instructors will include the Division Management Team
and the area trainer. The DMs will be responsible for
sections where "real world" application may be added to
enforce the learning.
•After the class the associate will receive the MLO number
(lender identification number) from the Human Resources
Department.
•The associate will return to their office and continue their
mentorship for 90 days. During this time the associate will
originate loans and maintenance existing loans.
•The manager or senior lender will have a checklist to
complete during those 90 days to ensure the associate is
able to apply their new skills.
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OTJ
ILT
Mentor
Training
• Associates are issued a guided learning binder to
complete under the tutorship of their manager or
senior lender. The binder covers the basics of lending
such as terminology, loan calculation and government
regulation.
• Associates must complete the binder and a test (80%
or better) to be eligible to attend the instructor led
class.
• The instructor led class is a two-day comprehensive
course consisting of roleplay, documentation, policy,
and case study exercises.
• The instructors will include the Division Management
Team and the area trainer. The DMs will be
responsible for sections where "real world" application
may be added to enforce the learning.
• This is a half-day course detailing the expectations of
the senior lender or manager's role as a mentor for the
new lenders
17
Task Analysis
The order of the tasks is important to the program. The learning in both the guided
learning and the instructor led begins with fundamentals of the loans process and builds up to
the application of the skills. For example, the associates may learn how to calculate a formula
in the early stage of the course to prepare them for the actual application in the credit bureau
section.
Loan
Terminology
Credit Reports
Loan
Documentation
Loan Policy
Loan Formulas
Mitigate
Loan
Regulation
Loan Products
and Services
Sales and
Referral Process
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References:
Hoffman, Bob, Ritchie, Don. (2006). Goal Analysis. San Diego State University.
http://edweb.sdsu.edu/courses/EDTEC540/EDTEC540BB/Mod05/mod05.htm
Justice, Lisbeth.(2003). Learner/Context Analysis. Objectively Speaking.
http://www.personal.kent.edu/~lkjusti1/objectivelyspeaking/objectively_speaking.htm
Morrison, Gary R., Ross, Steven M., Kalman, Howard K., Kemp, Jerrold, E., (2011). Designing
Effective Instruction 6th Ed. John Wiley & Sons, Inc.
Morrison, Gary R., Ross, Steven M., Kalman, Howard K., Kemp, Jerrold, E., (2013). Designing
Effective Instruction 7th Ed. John Wiley & Sons, Inc.
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Walden University M.S. in Instructional Design and Technology
Formative Evaluative Criteria for Application Assignments
Part 2: Design Document (Week 2)
Your design document details the essential components of your instructional plan. You
have provided a detailed plan identifying the following requirements.
•
•
•
•
•
•
Project Description and Goal Analysis
Learner Analysis
Contextual Analysis
Task Analysis
Instructional Objectives
Instructional Sequencing and Strategies
Excellent work! Continue to proceed with the development of your instructional plan.
Don’t hesitate to contact me if you have any questions.
Quality of Work
Submitted
Work reflects
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thinking.
A: Exemplary
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A = 4.00; A- =
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3.00;
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All of the
previous, in
addition to the
following:
All of the
previous, in
addition to the
following:
he
Demonstrates t
ability
intellectually to
explore and/or
The extent to
implement key
which the work
instructional
reflects the
student’s ability to- concepts.
Assimilation and
Synthesis of
Ideas
Demonstrates
r
insightful
g,
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critical thinkin
2. Apply
as well as
presented
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apply readings, ideas.
1. Understand the
assignment’s
purpose;
discussions, and
course
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materials.
exceptional
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Submitted but
Unacceptable
C+ = 2.50; C =
2.00;
C- = 1.75
F = 1.00
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to the required readings original source
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expectations,
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exemplary
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All parts of the
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of the
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thorough and
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which work meets the assigned
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included. criteria and
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an introduction and
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applicable to
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following fair-use,
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or
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y
assignment.
grammatical, or
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are not
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It is expected that all applications and reflective essays will be submitted according to the
assignment due dates indicated. Exceptions may be made at the discretion of the faculty
member if contacted by the student prior to the due date describing extenuating
circumstances. Last Updated: 7.14.09