Fair lending examination procedures summary and risk. Analyzing the fair lending risk of credit card operations. Millions of americans are unable to borrow from lending institutions largely because lenders do not have the proper credit information to prove an individuals willingness and ability to pay bills. Fair lending compliance in the indirect automotive market. Even if a company has the best intentions of following fairlending principles, its debatable whether the artificial intelligence engines that online lenders typically use and that banks are just starting to deploy are capable of making credit decisions without inadvertently lending in affluent sections and not in minority neighborhoods.
Role of data in fair lending compliance intelligence 23. Fair lending is a team sport and requires everyone at the companys involvement. Exceptions that deviate from standards or best practices created by a lender, such as pricing or credit scores, are not always a bad thing. Comply fair lending is a robust software solution based on the ffiec federal financial institutions examination council and cfpb consumer financial. Secure and fair enforcement for mortgage licensing safe act. Statistical techniques and fair lending marsha courchane, david nebhut, and david nickerson abstract there remains strong concern that, even after several years of intense scrutiny, lending discrimination persists. Apply to compliance officer, loan specialist, senior consultant and more. Also included is a quick reference table of the residential lending discrimination risk factors. Complying with antidiscrimination rules may represent one of the largest efforts of lenders compliance managers. Because of how regulated financial services and lending decisions are, you cant do that. Nonstandard measures also seem to have had a positive effect on bank lending.
Rata associates, the leading provider of hmdacra products and services to the lending compliance arena expanded into the fair lending market with the release of comply fair lending in 2004. Understanding online marketplace lending marketplace lending sometimes referred to as peertopeer or platform lending is a relatively new kind of online lending. The concerns encompass issues of lending denial disparities, use of predatory lending tactics. For example, the enforcement agencies are responsible for monitoring independent mortgage lenders compliance with the fair lending laws. Lending and lending operations make up a significant portion of your financial institutions portfolio of business. Thinking about fair lending and udap risks, consumer compliance outlook 2017. Intelligence and implications for credit risk management. The basicsfair lending laws and prohibited basis groups. Comply fair lending risk analysis software rata associates. This is a wonderful resource manualwe are confident that lenders, loan processors and compliance officers will.
Apply to compliance officer, senior compliance officer and more. If you have had experience with fair lending wiz, i would appreciate any input you can offer about the program. It is, and shall be, the policy of sandy spring bank the bank to make its credit products available to all qualified applicants without discrimination on the basis of race, color, religion, sex, national origin, marital or familial status, age over that of majority, handicap, receipt of public assistance, or good faith exercise of rights under the federal consumer protection act the. Artificial intelligence and machine learning in financial services. Can ai be programmed to make fair lending decisions. The cfpb, occ and fdic all have announced plans to increase supervision. These are very well written and will suit the needs of many for initial fair lending training, or as a refresher. Managing the fair lending risks of targeted internetbased marketing. Monetary policy report beige book quarterly report on federal reserve balance.
Preface table of contents part i compliance supervision and. Analyzing the fair lending risk of credit card operations with the increased emphasis on fair lending compliance by federal regulators, issuers of credit cards and other forms of unsecured consumer credit need properly designed compliance management systems to. How to analyze hmda and other data for fair lending compliance. Probank offers real estate lending compliance education and training for banks and financial institutions nationwide. Praise for fair lending complianceintelligence and implications for credit risk management brilliant and informative. Whether you represent a small community bank or a multibillion dollar institution, the experts at probank austin can provide sound, practical guidance toward growth and success. Ai and machine learning in regulatory compliance and supervision.
Marsha courchane on march 21, 20, the consumer financial protection bureau cfpb issued a bulletin on compliance with the equal credit opportunity act. Real estate lending compliance education and training. This program will provide the necessary tools to perform analysis of hmda and fair lending data. There is in my mind no greater opportunity for the creation of wealth than exists by lending the money you have earned through your own hard work to. In that sense, it is a menu of resources to be considered and selected from, depending on the nature and scope of the examination being conducted. In other words, interest rate cuts during the crisis produced beneficial effects on the growth of bank lending with no sign of a pushing on a string effect. An indepth look at innovative approaches to credit risk management written by industry practitioners. The book starts out with the basics a great reminder, then picks up speed. While a consultant is a valuable asset, fair lending compliance cannot be fully outsourced. Such lenders have been large originators of subprime mortgage loans in recent years and have more frequently been. A fair lending consultant can provide the following services. An uncertain future for fair lending enforcement at cfpb. All information discussed in the webinar will be clearlydocumented in a colorful and userfriendly handbook. Fair lending compliance specialist jobs, employment.
An uncertain future for fair lending enforcement at cfpb by melanie brody, ori lev and tori shinohara march 1, 2018, 10. Furthermore, certain regulations require employee training. The following is an excerpt from chapter 12 of volume ii of the mortgage professionals handbook. Bank counsel and any other department andor personnel concerned with fair lending performance will benefit by this webinars information. Is artificial intelligence a threat to fair lending. My regret was that i had not read the book fair lending compliance. Browse the amazon editors picks for the best books of 2019, featuring our favorite. This publication is intended as a summary of the fair lending examination procedures. The only truly allinclusive federal banking compliance advisory service staffed with attorneys, former auditors and compliance specialists. It applies to any extension of credit from commercial loans to home mortgages, including extensions of credit to small businesses, corporations, partnerships, and trusts.
To learn how we can help you achieve your compliance goals, visit. Fair lending plan policy manual mortgage policies and. Here you will find tools and resources to guide you through lending compliance regulations and their requirements, as well as safety and soundness. One objection to ai in lending is that artificial intelligence engines call for massive amounts of data to learn to make decisions the way humans do. This publication will serve as an essential reference text for those who wish to make credit accessible to underserved consumers.
This appendix offers a full range of information that might conceivably be brought to bear in an examination. Marketplace lending uses online platforms to connect consumers or businesses who seek to borrow money with investors willing to buy or invest in the loan. The program is designed for loan department management, compliance officers, testers, and auditors. Fair lending compliance assessment synergy partners and. Fdic consumer compliance examination manual september 2015 iv 1. This book deals primarily with compliance and credit risk management, but we. Fair lending compliance wiley online books wiley online library. Consumer compliance supervision bulletin december 2019. It is designed for bank ceos, presidents, compliance and cra officers, and others who have an interest in. Mcgurl, managing director mcgurl risk advisors llc. If fair lending, cra, hmda, bsaaml, udaap or branch strategy is. Fair lending report of the consumer financial protection.
However, the training should also match up with the banks size and complexity and the types of products and services that. The fair housing act fhact and equal credit opportunity act ecoa apply to mortgage lending and prohibit discrimination on several prohibited bases. This checklist is for use in conjunction with part ii of these procedures as a device for examiners to evaluate the strength of an institutions compliance program in terms of its capacity to prevent, and to identify and selfcorrect fair lending violations in connection. Intelligence and implications for credit risk earlier. Theres a fear that companies will be indiscriminate about what they throw in there. The fed consumer compliance supervision bulletin december. Lending compliance summaries bank compliance resources for lending regulations.
273 1582 1335 40 569 177 973 418 1075 933 1545 501 3 1535 988 677 316 1414 561 843 546 929 190 1320 1104 568 1295 556 1210 310 1277 342 417 725 614