Fair Lending

Fair Lending Analytics and Consulting Services

We help mortgage, consumer and commercial lenders achieve their Fair Lending compliance goals.

ADI brings more than 20 years of experience and expertise to your team to help assess your Fair Lending compliance needs, design a Fair Lending compliance strategy that meets those needs, and implement and execute meaningful Fair Lending compliance procedures, analysis, and reporting.

Our Fair Lending consulting services include CMS development, econometric and regression analyses, geographic analysis, comparative file reviews, risk assessments, and Fair Servicing reviews.

Compliance Management Systems

Strong Fair Lending compliance relies on an effective compliance management system (CMS). ADI learns about each client’s business model, existing compliance program and experience, and known limitations. We provide independent insight into the assets and vulnerabilities of your CMS and then create a plan for strengthening it. ADI designs an actionable and results-oriented plan and then assists your organization in implementing that plan.

Econometric & Regression Analysis

Regulators expect a Fair Lending CMS to contain a statistical testing component appropriate to the institution’s size and complexity. ADI’s deep knowledge and extensive experience supports our strong offerings of econometric and regression analysis. We apply this expertise to analyses of underwriting, pricing, pricing exceptions, and other areas of Fair Lending compliance, to determine if adverse outcomes are associated with a customer’s membership in a prohibited basis group.

Geographic Analysis

ADI compiles all relevant data on the geographic distribution of your  institution’s lending activity. We compare your lending to other lenders’ activity and marshal relevant demographic and socioeconomic data to provide context for your performance. We also use statistical analysis to identify high-risk geographies and explain why some apparent areas of risk may not present risk in proper context. ADI’s sophisticated mapping capabilities allow us to present conclusions in clear pictures of where lending opportunities exist.

Comparative File Reviews

Comparative File Reviews (CFRs) are a time-honored Fair Lending compliance methodology that ADI has employed since 2002. ADI’s experience conducting CFRs for lenders, as a stand-alone service, or as an extension of regression or econometric analysis, is deep and varied. We conduct CFRs on an outsource basis or in a collaborative process with our clients. For clients who do their own CFRs, ADI also provides guidance and can identify comparator files.

Risk Assessments

Fair Lending risk assessment is a critical component of a lender’s Fair Lending CMS. Assessments identify and measure the risk inherent in your financial institutions’ lending processes. Risk assessments also help the institution determine what controls and monitoring mechanisms are in place to mitigate those risks. When properly conducted, a risk assessment will identify Fair Lending risks and provide insight into how to minimize risk exposure.

Fair Servicing

Fair Lending compliance applies to the servicing, loss mitigation, and repossession or foreclosure processes, just as it does any other aspect of the lending process. Although this has always been true, regulators are scrutinizing and comprehensively analyzing lenders’ servicing operations with a Fair Lending focus. ADI helps lenders identify and mitigate Fair Servicing risk through reviews and assessments, statistical analyses, CFRs, and developing or refining policies and procedures.

We will design and implement the right solution to meet your Fair Lending compliance needs.

8 Critical Components of a Fair Lending Compliance Program

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