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Our bank is looking at adding a loan product, however there will be a minimum loan amount of the jumbo loan amount for our area. The product will be a 30 year fixed rate consumer mortgage loan. Would this product cause any fair lending issues? We would still offer adjustable rate mortgages up to 30 years for any loan amount, with no minimum.
I read in the FDIC manual about a loan minimum being a fair lending issue, but the example was a minimum loan amount overall, not on a particular product. Would offering adjustable rate 30 year loans with no minimum alleviate any fair lending issues?
Without more details it is difficult to reach a conclusion. If we understand your question, the new loan product will have a minimum loan amount of around $500,000. The product raises CRA issues since the fixed-rate product will not be available for low- to moderate-income borrowers. It also raises fair lending issues if demographic data shows that low- and moderate-income individuals in your area are minorities.
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