Fair Lending

Justice Department Announces New Initiative to Combat Redlining and Announces Settlement with Trustmark National Bank

The U.S. Department of Justice is launching a nationwide Combatting Redlining Initiative  to combat discriminatory lending practices, Attorney General Merrick Garland said on Friday. Garland said the illegal practice of "redlining," or avoiding lending to minority neighborhoods, remained a persistent problem, and the federal government was devoted more resources to identifying it and punishing lenders. [...]

October 22nd, 2021|
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Cadence Bank Settles with DOJ, OCC Over Lending Discrimination Allegations

The Justice Department has announced a settlement with Houston-based Cadence Bank to resolve allegations that the bank engaged in lending discrimination by ‘redlining’ predominantly Black and Hispanic neighborhoods in the Houston area. The Department alleged that the bank engaged in redlining between 2013 and 2017 by avoiding providing loans and other home mortgage services in majority-Black [...]

September 1st, 2021|
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HUD Issues Charge of Discrimination Against Mortgage Modification Company

The U.S. Department of Housing and Urban Development (HUD) recently charged a  California business for allegedly targeting Hispanic homeowners with illegal and discriminatory mortgage modification services.  HUD said that The House Lawyer, based in Redwood City, California, collected fees from Hispanic borrowers for loan modification services prior to completing the services, a violation of California law, while [...]

May 17th, 2021|
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CFPB Rescinds 2020 Policy Statements Issued Due to COVID-19

On March 31, 2021, the Consumer Financial Protection Bureau (CFPB) rescinded seven recent policy statements and one bulletin in an effort to ensure compliance with consumer protection laws and reinforce its supervisory and enforcement authority. These rescissions went into effect April 1, 2021. The policy statements were designed to provide flexibility to financial institutions that faced [...]

April 7th, 2021|
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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|
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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|
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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|
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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|
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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|
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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|
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Knowledge Center

HMDA Huddle 10 – Q&As for Tackling the Intricacies of HMDA

Posted: April 1, 2024

Welcome to the second quarter of your 2024 LAR season. With the 2023 submissions complete, HMDA data management demands continue, with quarterly filings that require as much care as the final product. Every quarter, new questions arise, and ADI can help answer some of the questions you may encounter in your preparations. In this issue, […]

HMDA Huddle 9 – Q&As for Tackling the Intricacies of HMDA

Posted: January 5, 2024

Happy New Year, HMDA Huddlers! It’s time to review the past year’s LAR and ensure that you’re ready to submit the cleanest data possible by March 1, 2024. ADI is here to answer some of the tricky questions you may encounter in your preparations. In this issue, we answer questions about information gathering to avoid […]

CRA Map

Redlining Enforcement Ramp Up: Prepare Now

Posted: October 27, 2023

The U.S. Department of Justice (DOJ) announced recently that through its “Combatting Redlining Initiative,” it has secured more than $107 million in relief for communities nationwide experiencing lending discrimination. Attorney General Merrick Garland declared, “This work is just the beginning – the Justice Department currently has over two dozen active investigations into redlining, spanning neighborhoods […]

News

Patriot Bank Agrees to $1.9M Settlement for Redlining

Posted: January 19, 2024

Patriot Bank, based in Millington, Tennessee, has agreed to enter into a consent order with the U.S. Department of Justice (DOJ) to resolve the federal government’s allegations that the bank avoided providing mortgages to people living in, or seeking to live in, majority Black and Hispanic neighborhoods.  Patriot, a community bank with eight branches, serves […]

CFPB Fines Bank of America $12 Million for HMDA Violations

Posted: November 29, 2023

The Consumer Financial Protection Bureau (CFPB) on Tuesday announced it is ordering Bank of America to pay $12 million in fines for violating federal laws related to mortgage disclosure. In a consent order, the CFPB said that Bank of America routinely submitted inaccurate information about mortgage applicants to the federal government over the past four years.  According […]

CRA Map

Regulators Issue Final Rule to Modernize the CRA

Posted: October 25, 2023

On October 24th, the Office of the Comptroller of Currency, Federal Reserve Board, and the Federal Deposit Insurance Corporation issued a final rule to strengthen and modernize the Community Reinvestment Act (CRA). This revision to the CRA regulation, the first comprehensive update since 1995, was issued with the following stated goals:  Encourage banks to expand […]

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