Links in “Fair Lending”

It’s possible. Navy Fed has been offering a 100% LTV mortgage product for which they charge a rate of 5% due to the higher risk and the fact that they waive private mortgage insurance. However, the 5% rate has caused these loans to meet the definition of a higher rate mortgage with the end result being that Navy Fed was the largest higher rate mortgage lender in the country in 2013. [10/1/14]

Since the collapse of the subprime market and the rise of more stringent lending requirements, more minorities are finding themselves shut out of the housing market. Upshot? Expect more fair lending scrutiny. [9/24/14]

Auto lenders find the CFPB's guidance on its methods for identifying discrimination in auto loans lacking. [9/19/14]

The CFPB has published its methodology for assessing fair lending aspects in non-mortgage lending products. Find out how the bureau uses a Bayesian Improved Surname Geocoding (BISG) proxy method to utilize the applicant's surname and geography to estimate the appropriate race and ethnicity. [9/18/14]

Not likely, according to this industry observer. An unsettled regulatory climate and hold-ups in the mergers and acquisitions arena over fair lending issues suggest that the trend in the number of community banks will continue to go down from 6,300 community banks now to 4,800-5,300 by the end of 2019. [9/11/14]

The proposed HMDA rules calling for far more data collection categories is a game changer that could lead to a replay of 1991, when the initial release of HMDA information ignited a firestorm of fair lending litigation. Now may be the time to run your institution's numbers using the proposed categories to see if there are disparities that should be addressed now before it starts to get toasty. [8/18/14]

When it comes to fair lending, many institutions fail to compare their performance to the complete contextual picture, neglecting such factors as income, low-/high-minority population, age, gender, etc. In this video, AffirmX EVP and Director of Risk Management Ken Agle gives us an idea of how to complete the fair lending picture to discover potential problems or explain misleading numbers. [6/19/14]

The merger of two Texas banks demonstrates another reason why a clean compliance program is needed for a smooth merger or acquisition. The regulatory scrutiny is on the bank's performance in helping to meet the credit needs of its communities, compliance with fair lending laws, and fair lending policies and procedures. [6/20/14]

Last year, the CFPB warned banks that dealer finance charge participation may violate Fair Lending rules, even if the practices are neutral on their face. The industry pressed for clarification from the CFPB on how it determines what would constitute discrimination. In testimony before the House yesterday, CFPB Director Cordray says that the bureau will be issuing a white paper this summer regarding the use of proxy methodology it would use. [6/19/14]

The Federal Reserve has appointed Eric Belsky, currently director at Harvard's Joint Center for Housing Studies, to oversee compliance with consumer protection and fair lending laws. [6/9/14]