Lessons in Fair Lending

  • Peer! Peer! Who Is Your Peer?

    Peer! Peer! Who Is Your Peer?

    The Fall 2016 edition of the Consumer Finance Protection Bureau’s Supervisory Highlights devoted several pages to the topic of redlining. Some of what the CFPB had to say about fair lending was not new—for example, that “redlining is a priority area in the Bureau’s supervisory work” or that “redlining is a form of unlawful lending […]Read More »
  • REMA: Reasonably Expected Market Area

    REMA: Reasonably Expected Market Area

    Recently I attended a seminar where a Federal Deposit Insurance Corporation representative used the term “REMA” in a discussion of redlining risk. Have you heard the term? It’s a helpful acronym to know if you desire to understand how the FDIC makes determinations about redlining. What follows borrows heavily from the FDIC representative’s comments on […]Read More »
  • Charter Bank Fair Lending Settlement with the Department of Justice

    Charter Bank Fair Lending Settlement with the Department of Justice

      The Department of Justice and Charter Bank of Corpus Christi, Texas have announced the settlement of the fair lending suit referred to the DOJ by the Federal Deposit Insurance Corporation. This suit is one of a long line of fair lending legal actions brought by regulators. While the provisions of the settlement contain some familiar […]Read More »
  • Mystery Shoppers Expose Alleged Redlining at BancorpSouth

    Mystery Shoppers Expose Alleged Redlining at BancorpSouth

    This month yet another financial institution has entered into a consent order with the Department of Justice and Consumer Finance Protection Bureau over allegations of discriminatory mortgage lending practices. BancorpSouth Bank, headquartered in Tupelo, Miss., is accused of: Structuring their lending area to avoid and/or discourage mortgage applications from consumers in minority areas (also known […]Read More »
  • A Closer Look at the CFPB’s Annual Report Part I: Approaches to Enforcement

    A Closer Look at the CFPB’s Annual Report Part I: Approaches to Enforcement

    Note: This blog is the first in a three-part series exploring the Consumer Finance Protection Bureau’s 2015 Fair Lending Report. Earlier this month the Consumer Finance Protection Bureau released its annual report of supervisory and enforcement action. The 2015 report includes insights into a number of high-profile actions the Bureau took last year – several […]Read More »
  • “Whether Intentional or Not” – Learning from the Fidelity Bank Settlement

    “Whether Intentional or Not” – Learning from the Fidelity Bank Settlement

    Last week yet another mortgage lender settled allegations of discriminatory lending against minority applicants. North Carolina-based Fidelity Bank agreed to spend $1 million dollars over the course of two years to boost lending in predominantly minority census tracts. Fidelity will also provide fair lending training to staff – including loan originators, processors and underwriters – […]Read More »
  • Redlining Allegations against First Federal Bank of Kansas City

    Redlining Allegations against First Federal Bank of Kansas City

    Last week the First Federal Bank of Kansas City became the latest financial institution to settle redlining allegations after the Metropolitan St. Louis Equal Housing and Opportunity Council (EHOC) and Legal Aid of Western Missouri alleged that the bank’s service area was designed in a way that excluded areas of high African American population. A […]Read More »
  • Sage Bank: Some Fair Lending Compliance Take-Aways

    Sage Bank: Some Fair Lending Compliance Take-Aways

    Once again the Justice Department has filed a complaint alleging discrimination by a residential mortgage lender. In a recently proposed consent order, the DOJ has accused Sage Bank, based in Lowell, Mass., of a pattern of discriminatory pricing that disproportionately impacted African-American and Hispanic borrowers. “Sage Bank’s loan pricing policies created the risk that borrowers […]Read More »
  • Wells Fargo & Minimum Credit Scores for FHA Loans: What You Should Know

    Wells Fargo & Minimum Credit Scores for FHA Loans: What You Should Know

    In a move aimed at deterring scrutiny from the Justice Department, Wells Fargo –the largest home loan lender in the United States – has raised the minimum credit score requirements for Federal Housing Administration (FHA) loans. In 2014, Wells Fargo had lowered credit score requirements to 600. Now borrowers will need to have a minimum […]Read More »
  • The Consequences of Redlining: Hudson City Savings Bank

    The Consequences of Redlining: Hudson City Savings Bank

    Less than a month ago the Department of Justice and Consumer Finance Protection Bureau pledged to work in cooperation to fight what they saw as a resurgence of redlining cases. It seems that they have kept their promise. In a recently released consent order, the DOJ and CFPB have ordered Hudson City Savings Bank – […]Read More »
  • Fair Lending Regression Analysis: Some Frequently Asked Questions

    Fair Lending Regression Analysis: Some Frequently Asked Questions

    ­Fair Lending Regression Analysis: Some Frequently Asked Questions Whether you use regression analysis in your fair lending monitoring program or you are thinking about using it, a few regression related questions are asked regularly. This blog will discuss four of the more popular questions. What data do I need? Depending on whether you are going […]Read More »
  • Lessons in Fair Lending: Santander Holdings USA, Inc.

    Lessons in Fair Lending: Santander Holdings USA, Inc.

    Last week the Federal Reserve Bank of Boston released the written agreement between Santander Holdings USA, Inc. and the Federal Reserve Bank. There are at least two things about this document that are noteworthy: (1) the level of detailed requirements and (2) the fact that the Boston Fed Bank made this level of detail public. […]Read More »
  • Data Driven Regulation: What It Means for Fair Lending Compliance

    Data Driven Regulation: What It Means for Fair Lending Compliance

    The Consumer Finance Protection Bureau prides itself on being a data driven organization when it comes to fair lending compliance. What does that mean for a compliance officer? More importantly, what does it mean for your next fair lending compliance exam? Does it mean more number crunching? In part, yes, but it also means much […]Read More »
  • Insights into the DOJ 2014 Annual Report on Equal Credit Opportunity Act Referrals

    Insights into the DOJ 2014 Annual Report on Equal Credit Opportunity Act Referrals

    This week the Department of Justice published its Equal Credit Opportunity Act or ECOA annual report to Congress. Some of the data in the report makes for interesting reading. A Look at the Numbers For 2014 DOJ received 18 referrals from the various agencies (CFPB, FDIC, FRB, OCC NCUA, HUD and the FTC). Twelve of […]Read More »
  • Centralized Regulation: A Closer Look at Janet Yellen’s Recent Remarks

    Centralized Regulation: A Closer Look at Janet Yellen’s Recent Remarks

    Janet Yellen, Chairwoman of the Board of Governors of the Federal Reserve, recently gave a speech that questioned Wall Street’s ethics and culture – and hinted at an overall approach to regulation that should have compliance officers taking note. To quote Ms. Yellen “…the Fed also promotes safety and soundness by seeking to ensure that […]Read More »
  • What Compliance Officers Can Learn from JPMorgan Chase

    What Compliance Officers Can Learn from JPMorgan Chase

    In a recent filing with the Securities and Exchange Commission, JPMorgan Chase reported that it has been questioned by the U.S. Department of Justice regarding possible racial disparities in loans the bank purchased from auto dealers. While the report does not mention whether the bank is the target of the probe or simply participating in […]Read More »
  • Another Lesson in Fair Lending: First United Bank of Texas

    Another Lesson in Fair Lending: First United Bank of Texas

    Background The First United Bank of Texas (FUB) is a $1.2 billion FDIC regulated subsidiary of Plains Bancorp operating in western Texas (Dimmitt, TX). The FDIC/DOJ investigations found the Bank charged Hispanic applicants 205 basis points (BPs) more than non-Hispanic applicants for unsecured consumer loans. After performing a regression analysis, the basis point differential between […]Read More »
  • Compliance Officers: Earning a Seat at the CEO’s Table

    Compliance Officers: Earning a Seat at the CEO’s Table

    At the most recent ABA Compliance Conference one session focused on how compliance officers get invited to the table with other key management. When asked this question, the CEO of Ally Bank looked at the audience of compliance officers and said “You earn it.” Few people in a financial institution are as well-positioned to “earn […]Read More »
  • Learning from the OCC’s Semi-Annual Risk Perspective Report

    Learning from the OCC’s Semi-Annual Risk Perspective Report

    Last Friday the OCC released its Semi-Annual Risk Perspective report. A key finding of the report is that increased competition among financial institutions has resulted in increased credit risk due to the weakening of underwriting standards as well as the increased layering of risk in credit products such as indirect auto lending. In this environment, […]Read More »
  • Ally Financial Fair Lending Consent Order

    Ally Financial Fair Lending Consent Order

    By now most compliance officers have heard about the consent order between Ally Bank, the CFPB and DOJ.  In short, Ally agreed to pay a total of $98 million in fines ($18 million) and restitution ($80 million) in a disparate impact settlement of an indirect auto lending case.  While several law firms and others have […]Read More »

Leave a Reply

Your email address will not be published. Required fields are marked *

Protected by WP Anti Spam