Hardship Coding Frameworks: Foundation for Fair Treatment & Portfolio Insight

Clear, Actionable Coding Promotes Fair Treatment in Hardship
We help you implement consistent, auditable hardship codes across all products and servicing channels. This lays the essential foundation for fair borrower treatment, robust regulatory compliance, and invaluable portfolio-level insights.

Key Components & Design Considerations
We bring order and precision to hardship tracking by developing:

• Standardized Categories: Define clear hardship categories (e.g., job loss, medical, natural disaster) with consistent definitions.
• Code Assignment Protocols: Align codes to borrower disclosures, intake methods (digital, phone), and required documentation.
• Code Hierarchy Logic: Build intelligence for differentiating primary vs. secondary hardship types and time-limited vs. ongoing hardship.
• Usage Protocols: Create clear guidance for when and how to accurately apply, remove, and update hardship codes.
• System Integration: Seamlessly map codes across your systems of record and contact platforms for accurate tracking and segmentation.

Operational Levers & Tools
We embed these frameworks directly into your day-to-day operations:

• Agent Decision Support: Provide agents with intuitive decision trees to apply the correct hardship code based on borrower statements.
• Digital Intake Automation: Configure online hardship forms to auto-assign appropriate codes, enhancing efficiency.
• Performance Monitoring: Implement robust reporting to track the flow, prevalence, and resolution of hardship accounts.
• Compliance Alignment: Ensure Fair Lending and Reg F rules are consistently followed in code usage and subsequent treatment.

Why It Matters: Value to Your Bank
A strong hardship framework empowers your bank to:

• Ensure Consistent Treatment: Treat similar borrowers similarly, regardless of team or channel.
• Enhance Forecasting Accuracy: Accurately forecast delinquencies, deferral needs, and loss mitigation demand.
• Strengthen Evidence: Clearly demonstrate robust control to regulators and auditors.
• Improve Customer Outcomes: Align specific solutions to specific hardship types, leading to better borrower support.

Risks & Controls
We help you minimize potential risks through built-in controls:

• Prevent Misclassification: Address the risk of incorrect coding, which can cause downstream issues in loss mitigation eligibility.
• Implement Governance: Prevent inconsistent or discriminatory treatment.
• Shore up Communications: Mitigate missed disclosures or other regulatory concerns tied to hardship communications.

How We Partner to Build It
We collaborate with your strategy, collections, compliance, and systems teams to create a precise taxonomy of hardship types. We then embed these codes into your servicing systems, train agents, and build essential reporting. Our goal is to deliver a durable, scalable hardship framework that supports both strategic decision-making and continuous compliance.

Why Spinnaker?
We’re former operators, risk leaders, and strategists in the banking industry who’ve been in your shoes. Every consultant on our team has over 10 years of real-world experience leading credit risk, collections, compliance, and analytics functions at banks and fintechs. We have managed through the last recession and the pandemic. We know what works because we've done the work. That’s why our solutions are practical, actionable, and designed to perform in the real world.

Contact us today for an exploratory conversation: Shawn.Sweeney@SpinnakerConsultingGroup.com