Welcome to the Compliance Cohort. We are a group of compliance professionals working to make compliance easier. Our goal is to take complex compliance concepts and put them in simple terms that apply to the real world. We are glad you have found us and look forward to collaborating in the future.
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All in Fair Lending
In this Compliance Clip (video), Adam explains how a lender could end up with overt evidence of disparate treatment. This video takes just 7 minutes to view and can be shared with your lending team or others in your organization who need to understand fair lending rules and regulations. And be sure to watch our for Adam’s alter ego lender personality in this video…
In this Compliance Clip (video), Adam explains the differences in who is a “protected class” under the Equal Credit Opportunity Act and the Fair Housing Act. This short training video is a fair lending topic.
On 9/15/20, the Consumer Financial Protection Bureau (CFPB) issued an “Outline of Proposals Under Consideration and Alternatives Considered for Section 1071 of the Dodd-Frank Act.” This release explains how the CFPB is currently working to implement Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that will create a requirement for financial institutions to compile, maintain, and report certain data on applications for credit from women-owned, minority-owned, and small businesses.
In this video, Adam talks about the third type of discrimination recognized by the courts: disparate impact. He explains the main source of this type of discrimination and gives a few examples of what to look for.
In July of 2020, the CFPB issued a Request for Informatino on the Equal Credit Opportunity Act and Regulation B which is seeking comments and information to identify opportunities to prevent credit discrimination, encourage responsible innovation, promote fair, equitable, and nondiscriminatory access to credit, address potential regulatory uncertainty, and develop viable solutions to regulatory compliance challenges under the Equal Credit Opportunity Act (ECOA) and Regulation B. Comments are due 60 days after publication in the Federal Register.
On 7/23/2020, the U.S. Department of Housing and Urban Development (HUD) announced the termination of the Obama Administration’s Affirmatively Furthering Fair Housing (AFFH) regulation issued in 2015. According to HUD, this rule “proved to be complicated, costly, and ineffective— so much so that Secretary Carson essentially removed its burden on communities by suspending the regulation’s 92 question grading tool in January 2018.” Replacing this rule is a brand-new rule called Preserving Community and Neighborhood Choice. According to HUD, this rule
On April 30, 2020, the CFPB released their annual Fair Lending Report to Congress that highlights how in 2019 the CFPB continued to focus their fair lending efforts on mortgage lending, student loans, small business lending and other market areas. The CFPB also explains that they encouraged consumer-friendly innovation to, among other things, expand access to unbanked and underbanked consumers and their communities.
This is a guest post by one of our Compliance Cohort members, Jennifer Johnson. Jennifer is a Vice President and Chief Risk Officer at a $225 million community bank, and shares her years of experience in multiple banks with us in this article.
In a previous article, we discussed those frustrating customers who come to us with bits and pieces of the information we need to make a loan decision, providing us with an incomplete application. If you’re OCD like me, those situations drive you more than a little crazy, especially when you know that you have obligations to notify the customer of your decision within 30 days of receipt of the request. So how do you handle these scenarios without pulling out your hair? I have a simple solution…
In this Compliance Clip (video), Adam discusses concerns relating to keeping photo IDs in a loan file.
On June 28, 2019, the CFPB released their annual report on fair lending. Coming just seven months after the last annual report to congress (12/4/18), this annual report to Congress describes the Bureau’s fair lending activities in innovation, outreach, prioritization, guidance and rulemaking, supervision, and enforcement for calendar year 2018. This is the first report released under new CFPB Director, Kathleen Kraninger.
NOTE: The 2018 CFPB fair lending report to Congress will be included in our 2Q 2019 Regulatory Update program, which will be released in July of 2019, covering all of the regulatory changes that a compliance professional needs to be aware of from the activity that occurred during the 2nd Q of 2019.
