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Fair Lending

Fair Lending Myths

I’ve attended many panels, workshops, and conferences on fair lending. All too frequently at these events, I hear someone from the audience or even a panelist declare a “fair lending myth.” A fair lending myth is a statement about regulatory enforcement that sounds reasonable on the surface but does not …

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What’s the Point of Fair Lending Monitoring?

In my experience, there are more lenders who do little to nothing to monitor fair lending than those who actively manage it. Those that do less tend to be independent mortgage companies rather than depository institutions. I believe there are several reasons for this outcome: A) Culture and Traditions: Prior …

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Fair Lending Enforcement in the First 100 Days of the Trump Administration

By Paul Hancock & Olivia Kelman The Obama administration prioritized an aggressive, and at times novel, approach to enforcement of the federal fair lending laws—an approach that relied heavily, and at times solely, on statistics to establish liability for lending discrimination. Nowhere was this emphasis more prevalent than in matters …

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What New HMDA Data Points May be Modified before Release to the Public?

The CFPB’s final rule on HMDA (Regulation C) requires lenders to collect, record, and report information on 48 data points, of which 25 are new and 23 existing. For over 25 years, the Federal Financial Institutions Examination Council (FFIEC) also has annually released a transaction-level database of all the submitted …

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The Influence of Marketing Practices on Fair Lending (Part 1)

 The Consumer Financial Protection Act defines the term fair lending “as … fair, equitable, and nondiscriminatory access to credit for consumers” (12 U.S.C. §5481(13)). The Equal Credit Opportunity Act (ECOA) prohibits treating an applicant less favorably than other applicants on a prohibited basis at any stage of the credit transaction.  …

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Managing Resources in Fair Lending (part 2): How much should we budget?

Last month, I indicated that fair lending resources are a function of the following: 1. the number of lines of business (LOBs); 2. the number of channels within each line of business; 3. the number of products with unique underwriting criteria; 4. the number of states and markets in which …

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Managing Resources in Fair Lending

Lenders are often faced with questions: What resources do I need to manage fair lending? How much should I budget? The human, technological, and monetary resources needed to manage fair lending risk vary by a lender’s size and scope of operations. The fair lending resources demanded are a function of …

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The Crystal Ball Says Fair Lending is a 2017 Hot Topic

I cannot believe that 2016 is over and in the record books!  And, what a year it was!  Wow! But, now that 2016 is in our rear-view mirror, it’s a good time to take a quick look into the future.  What might we expect to see in the regulatory crystal …

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The Fair Lending Committee: Form that creates the substance

 In my 20-plus years of fair lending and Community Reinvestment Act (CRA) consulting, I have seen many lenders struggle with establishing a cohesive and effective fair lending compliance management system (CMS). The struggle often stems from design issues related to the fair lending organizational infrastructure. What are the design elements …

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