When talking about what her "Gamma" does for a living, two-and-a-half-year-old Lily Ray Jamgochian doesn't mention banking.

"She says, 'Boss,' " said Barb Godin, the chief credit officer at Regions Financial. "I just love it."

It's a fitting moniker for Godin, who this year led a transformation of the way the Birmingham, Ala., company manages credit risk.

Godin moved a majority of her back-office underwriting staff into the front-line business units, to work side by side with lenders. The intent is to make the bankers who interact with Regions customers more accountable for the quality of the loans they make.

"In the past, there was a lot of, 'Let's throw this against the wall and see if credit risk will approve it, and if they approve it, then I'm off the hook,' " Godin said. "Not anymore."

Barb Godin, Regions Financial's chief credit officer, moved a majority of her back-office underwriting staff into the front-line business units, to work side by side with lenders. The intent is to make the bankers who interact with Regions customers more accountable for the quality of the loans they make.

Now the underwriting staff has an active role in the day-to-day operations within their specialty areas, including activities such as product development.

Over time, the move is meant to ingrain risk management into the company culture as part of everything it does, so that the bankers are thinking about the impact of their actions rather than ceding that responsibility to the credit risk specialists.

"What used to happen is they would take a credit application, and they would look at it and say, 'I think it's OK, but I'm going to hand it over to the credit group, and they'll make the final decision,' " said Godin, who is on our list of the Most Powerful Women in Banking. "Now it's their problem — they have to make the decisions and have their names on that dotted line."

It's a change that Godin describes as a long time coming.

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A 14-year veteran of the company, Godin took over as the top credit officer in 2010, during the depths of the mortgage meltdown, and she started making changes immediately. At that time, there was a lot of concern about whether the company would survive, she recalled.

Credit controls, or lack thereof, were partly to blame for Regions' crisis-era woes. If the company had strengthened its controls when the market was booming, it would have been better positioned to navigate the downturn, Godin argued.

So when she was named top credit officer seven years ago, she quickly got to work making changes. "The very first thing I did was I made sure everyone knew who was in charge," she said.

She ordered a 25% cut in incentive compensation for her entire department — partly to send a message that there were "certainly things that we could have done better" before, she said. "That's when everyone went, 'Oh my god, she's serious.' "

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Godin said she's proud of Regions' recovery since the crisis. She is also confident that the reorganization put in place this year will put the company on more solid ground in the future.

Still, it was tough losing such a large chunk of her staff to other departments, she said. Godin now oversees about 400 people, down from about 1,200 two years ago. Among the teams that report to her directly is commercial collections — a division she calls her "canary in the coal mine," since it allows her to spot trends in problem credits.

She is also in charge of a group that uses data and analytics to spot areas of emerging risks and opportunities. The group most recently found warning signs in the auto lending and multifamily real estate markets, prompting Regions to pull back.

Before Godin transferred many of her employees to the front lines, she made sure they understood the mission. "I sat the people down who I was sending over — the senior people — and said, 'Here's my expectation, and I know you're going to do a great job.' "

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Kristin Broughton

Kristin Broughton

Kristin Broughton is a reporter for American Banker, where she writes about the business of national and regional banking.