In my seminars and webinars around the US I frequently refer to the community bank inferiority complex. Many community banks feel that their compliance programs are not as good as programs at larger banks. My response to these laments is to point out that the primary difference between a community bank compliance program and the compliance program at a larger bank is that the larger banks tend to make larger mistakes. There is a never […]
Tag: Fair Lending
DISCRIMINATION AND THE LAZY BANKER SYNDROME
In a recent case the FDIC claimed a bank violated ECOA and Regulation B by engaging in a pattern or practice of denying applications for a credit card based on an initial match of applicant names to the Office of Foreign Asset Control’s list of Specially Designated Nationals (“SDNs”) without further verification that the applicants were in fact SDNs, which resulted in a disparate impact upon Hispanic applicants. The bank agreed to pay a civil […]
CFPB BULLETIN 2012-04 –FAIR LENDING
On April 18, 2012 the Consumer Financial Protection Bureau issued CFPB Bulletin 2012-04 that explains the agency’s position on compliance with the Equal Credit Opportunity Act and Regulation B. The bulletin does not offer any new insights into Fair Lending issues, but the CFPB certainly makes it clear that the agency is focusing on fair lending issues not only in mortgage lending, but also in credit cards, student loans and auto loans. A copy of […]
DISABILITY DISCRIMINATION
On February 27, 2012 the Department of Housing and Urban Development (HUD) charged Bank of America (BOA) with discriminating against disabled homebuyers. The Fair Housing Act makes it illegal to discriminate in the terms and conditions of a loan to an individual based on a disability, including imposing different application or qualification criteria, and also makes it illegal to inquire about the nature or severity of a disability except in limited circumstances. “Holding homebuyers with […]
2012 – THE YEAR OF FAIR LENDING ISSUES
2012 is going to be a big year for Fair Lending issues. In late December 2011 the Department of Justice (DOJ) entered into the largest residential fair lending settlement in the agency’s history. The $335 million settlement resulted from the lender charging higher rates and fees to African-American and Hispanic borrowers than non-Hispanic white borrowers. Attorney General Eric Holder has made clear that DOJ is gearing up for additional fair lending suits. DOJ has filed […]