Fair Lending

CFPB Signals Discrimination Based on Sexual Orientation or Gender Identity is Illegal

On March 9, 2021, the Consumer Financial Protection Bureau (CFPB or Bureau) issued an Interpretive Rule that the prohibitions against sex discrimination in the Equal Credit Opportunity Act (ECOA) and Regulation B encompass sexual orientation discrimination and gender identity discrimination. When published, the rule will have immediate effect. The new interpretive rule follows a landmark Supreme Court [...]

March 10th, 2021|

Aligning Fair Lending Testing with Why Consumers Withdraw their Mortgage Applications

Download This Article Withdrawn applications reflect an increasing proportion of non-approved first-lien mortgage applications as denials have become relatively less numerous. A decade ago, based on 2009 HMDA data, denials comprised just over one-half (53 percent) of non-approved first-lien applications. Denials fell to less than one-third (31 percent) of non-approvals a decade later. Over the [...]

February 18th, 2021|

Aligning Fair Lending Testing with Why Consumers Withdraw their Mortgage Applications

Banks and non-depository mortgage companies engage ADI to evaluate Fair Lending risk relative to consumer outcomes from their underwriting activities. We endeavor to align our solutions with the reasons consumers withdraw prior to an approval/denial decision based on the merits.   In the past several years, the proportion of non-approved HMDA-reported applications that were denied based on review of an applicant’s credit [...]

February 9th, 2021|

NYDFS Calls For Nonbank Community Lending Requirements, Cites Hunt Mortgage

On February 4th, State financial regulators cited Buffalo-based Hunt Mortgage Corp. (Hunt) for weakness in lending to minorities and minority neighborhoods, as they released a report finding an overall lack of lending by nonbank mortgage companies in Buffalo, despite laws banning the practice of redlining. Hunt is a subsidiary of Hunt Real Estate Corp., the [...]

February 8th, 2021|

Updated Census Bureau Data May Create New Compliance Risk for Lenders in 2022

Download This Article With the transition between presidential administrations, new regulations, and the ongoing effects from the pandemic and corresponding economic crisis, lenders are facing a dynamic environment in 2021 with respect to managing compliance risk under Fair Lending laws and the Community Reinvestment Act (CRA). There is another factor, however, receiving less attention but [...]

January 25th, 2021|

Lessons From the Recent Washington Federal Bank HMDA Settlement

Download This Article The recent settlement between Washington Federal Bank and the Consumer Finance Protection Bureau of reporting violations under the Home Mortgage Disclosure Act (HMDA) demonstrates that mortgage lenders should maintain a high level of focus on their compliance management system. In this article, we compare the bank’s earliest and most recent 2017 HMDA submissions to uncover the likely sources of [...]

January 12th, 2021|

CFPB Releases Outline of Small Business Data Collection Rulemaking

On September 15th, the Consumer Financial Protection Bureau (CFPB) released an Outline of Proposals Under Consideration for a small business lending data collection and reporting rulemaking pursuant to Section 1071 of the Dodd-Frank Act.  Section 1071 amends the Equal Credit Opportunity Act (ECOA) to require financial institutions to collect certain data regarding applications for credit for women-owned, [...]

September 21st, 2020|

Key Insights from the Townstone Financial Redlining Complaint

Download This Article In a recent Complaint filed by the Consumer Financial Protection Bureau (CFPB) against Townstone Financial, Inc. (Townstone), the CFPB alleges that Townstone violated Fair Lending laws by redlining certain geographic areas. The Bureau also asserts that Townstone engaged in practices that discouraged, on the basis of race, potential applicants living in or [...]

July 28th, 2020|

NAR and Quicken Loans ask HUD to Withdraw Proposed Amendments to Fair Housing Act

In recent days, both Quicken Loans, the nation’s largest lender, and The National Association of Realtors (NAR), the nations’ largest trade organization, have called on the Department of Housing and Urban Development (HUD) to withdraw its proposed rule to amend the HUD interpretation of the Fair Housing Act’s disparate impact standard. Bill Emerson, vice chairman of Quicken Loans, [...]

July 15th, 2020|

OCC Releases Semiannual Risk Perspective – Warns of Covid-19 Related Increased Risk

On June 29th, the Office of the Comptroller of the Currency (OCC) released its Semiannual Risk Perspective report, finding that due to the current COVID-19 pandemic will stress institutions' financial performance this year. The report also said that compliance risk is on the rise, in part because of federal programs related to the CARES Act and [...]

July 2nd, 2020|