Fair Lending is the latest threat for Mortgage Banks, Wholesalers, Mortgage Bankers, and Brokers.
Now more than ever it is important to take a good look at your Fair Lending compliance program. The risk of non-compliance with fair lending laws can bring a host regulatory enforcement actions as well as negative publicity that can wipe out not only a company’s capital but also goodwill.
In fact, currently many regulators are stepping up their scrutiny of fair lending compliance programs in order to prevent any discrimination in loan originations or loan workouts.
Having a comprehensive fair lending program is necessary to protect a company's risk profile.
Under the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA), the two laws that are the cornerstone of fair lending, it is illegal to discriminate against a loan applicant or borrower based on certain prohibited basis such as race, national origin, sex, marital status, age and other factors.
Not only Banks, but also Mortgage Bankers, Brokers and Wholesale Lenders are expected to have a written board of directors approved fair lending program.
The Fair Lending program is expected to have the following elements:
- A fair lending risk assessment that is appropriate for the companies size, complexity and operations
- Written fair lending policies & procedures
- A designated fair lending compliance officer
- Ongoing monitoring to prevent & detect violations
- Board of directors and employee training
If a pattern or practice of discrimination is identified, the regulator is mandated by law to make a referral to the Department of Justice (DOJ) for ECOA violations and Department of Housing and Urban Development (HUD) for FHA violations. The DOJ or HUD may decide to prosecute or return the referral to the regulator for enforcement action and resolution. The Bank's Community Reinvestment Act (CRA) rating will also be downgraded for fair lending violations. The company can also be sued by plaintiff attorneys or community activist groups.
About This Course
This training is designed for all company employees to attend on an annual basis as a part of a company's fair lending program. The course will take you approximately 50 minutes to complete. There is about 40 minute s of total video segments and then a short quiz.