What controls whether Spreads are used when automatically testing covenant compliance?

The correct answer indicates that the use of spreads when automatically testing covenant compliance is governed by a system property. System properties are configurations within nCino that define specific functionalities or behaviors in the system. They are often set by system administrators and can control a wide range of features, including how the system processes financial data.

In this context, a system property would be configured to enable or disable the use of spreads in covenant compliance testing, directly impacting how the system performs its analysis. It ensures that the testing aligns with the bank's policies and regulatory requirements. This means if a bank requires spreads for covenant testing, the system can be adjusted accordingly through the system property, enabling consistent compliance checks based on set parameters.

Other options, while they may impact various aspects of the nCino platform, do not specifically control the usage of spreads in this particular process. User settings might provide individual customization but would not typically override fundamental system operations. Loan type and admin permissions play essential roles in configuration and access but do not directly dictate the mechanics of covenant compliance testing concerning spreads.