Conducting Fair Lending Training for Directors

Conducting Fair Lending Training for Directors

Adam uses this Compliance Clip (video) to provide some tips for training the Board of Directors on Fair Lending and also provides an overview of a training program available here that could be used for Fair Lending training for the Board.


Video Transcript

The following is a transcript of this video.

This Compliance Clip is going to talk about conducting fair lending training for your board of directors. The question is, why do we conduct fair lending training for our directors or why should we? Well, there's a number of reasons.

First of all, we've been hearing that examiners are actually recommending fair lending training for the board. That is really a good reason to conduct the training, especially if your examiners have already told you need to conduct the training. We also know that directors are ultimately responsible for fair lending compliance. When somebody is also responsible for something, it's important that they get trained in that particular area. Also, fair lending is a high risk. And when you have a high risk area, it's important to spend the most time and resources on that particular area so that the directors understand their responsibility for oversight.

Now, how do we conduct fair lending training for our directors?

First of all, we have a number of considerations and the first consideration is our audience. The directors have a few things that are a little bit different from other audiences that we must take into consideration. For example, training must be comprehensive since our directors are ultimately responsible for oversight of the fair lending function, but it also must be provided in simple and easy to understand terms. The training really needs to be at that high level where your directors can understand their responsibilities. Also, directors really need the training to be to the point, so it has to have those considerations.

Now, as far as content, there's a number of things that could and should be included in the training. It's important to explain a history and overview of fair lending, to talk about the risks of fair lending, and to talk about what directors need to be looking for when they are using their oversight function in their financial institution.  Those are all things that directors should be looking for. 

There's a couple more considerations.

The first is timing. For your directors it really cannot be too long. It needs to be pretty short but not too short. So you can't go two hours in your training but you also can't go three minutes. So finding that line in between is a very challenging task that needs to be taken into consideration. 

Also taking into consideration are your delivery methods. So how are you going to deliver fair lending training to your directors? One way to do this is to provide a live presentation. This could be a compliance officer or senior lender. It can be in-house or if you are tired of hearing that same person talk year after year after year, which I've seen happen sometimes, you could bring in somebody outside. But when you bring in an outside presenter, that can become very costly very quickly.

So there's other options besides a live presentation and those could include a webinar. But unfortunately a lot of webinars are two hours long and that's often too much content for your directors. So there's always the option of videos. That's what we do here at the Compliance Cohort. 

Thanks so much for stopping by our site and I hope you have a wonderful day.


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