During 2000--2008, subprime mortgage loans were a profitable and popular commodity for banks and lenders alike. The majority of banks that offered this type of mortgage eventually suffered grave financial consequences, largely due to the lack of risk-mitigating processes within their mortgage portfolio. Guided by the stewardship theory, the purpose of this qualitative multiple case study was to explore the risk-mitigation protocols that 4 bank CEOs employed in Northern California used to mitigate the offering of this risky product. Semistructured interviews were used to elicit detailed narratives from these purposively selected bank CEOs on their experiences in risk mitigation. A review of company documents, core value policies, and member checking of initial interview transcripts aided in the overall reliability and validity of the final interpretations. After using Robert Yin's five steps of data analysis, six themes were derived from the final interpretations: risk management as a culture; leaders making prudent, calculated risks on their mortgage lending platform; risk committees set in place to oversee risk strategies; a fiduciary responsibility to grow responsibly; consistent guardrails implemented within the loan portfolio; and leaders using discipline, execution, and correct judgment. By implementing these risk-mitigation strategies, these specific banks were able to survive the mortgage recession with very little financial repercussion. These findings may influence social change by uncovering risk-mitigation strategies in an effort to alleviate this risky product being offered to consumers.
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