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Zalewski ppt for 11 09 version 2 final [compatibility mode]

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Introductory Fair Lending presentation intended to be used for a Board of Director's training

Introductory Fair Lending presentation intended to be used for a Board of Director's training

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Zalewski ppt for 11 09 version 2 final [compatibility mode] Zalewski ppt for 11 09 version 2 final [compatibility mode] Presentation Transcript

  • Fair Lending Training g g
  • Fair L di A li t F i Lending Applies to: All Loans Application Process Loan Processing Loan Underwriting g Collection Process
  • Consequences of N C f Noncompliance li • Longer regulatory exams • Lawsuits • Reputation Risk
  • Fair Lending Laws • Fair Housing Act (FHA-1968) • Equal Credit Opportunity Act (ECOA-1974) • Home Mortgage Disclosure Act (HMDA-1975)
  • Fair Housing Act a ous g ct Prohibits discrimination in housing based on: – Race o co o ace or color – Religion – National Origin – Sex – Familial status – Handicap
  • Equal C ed t Oppo tu ty Act qua Credit Opportunity ct Prohibits discrimination in lending based on: –SSex – Marital status – Race, C Color, National O Origin – Age – Religion – Receipt of protected income/public assistance – Exercise of rights under the consumer credit laws
  • Home Mortgage Disclosure Act • Data reporting requirements to detect ata epo t g equ e e ts discrimination in housing related credit. • Applies to loan applications that are incomplete, withdrawn, denied, and originated. g • HMDA data collection policies, procedures and p ,p internal controls need to be in place.
  • Overt Discrimination: O t Di i i ti Open or blatant discrimination on a prohibited basis. Example: A lender offers a credit card with a limit of up to $750 for applicants aged 21 to 30 and $1,500 for applicants over the age of 30.
  • Disparate Treatment: Different treatment based upon a prohibited factor (Race, sex, national origin, etc.). • Considered discrimination because there is no credible, non-discriminatory reason to explain the difference in treatment, such as: diff i t t t h – Denial of “similarly situated” applicants – Loan pricing and fees charged are not consistent
  • Disparate Impact • A uniform policy or practice that results in an adverse impact on a protected class of applicants. pp • Example – “loan minimums” that are not based loan minimums on a business necessity.
  • Regulatory Direction • More regulatory resources dedicated to consumer protection. t ti • NCUA Regulatory Alert 09-RA-09
  • Robert Zalewski, CUCE , CU HR Solutions 1-800-262-6285 ext. 493