Hi All,

I am in the process of conducting a Fair Lending Mortgage Review. Is there any resource tool that someone could please direct me to as I prepare to take on this monumental task? Any guidance would be greatly appreciated. If you wish to send any information through private message please feel free to do so.

Thank you

I assume you have a copy of the Interagency Examination Procedures.

I have a hard copy from the FDIC titled Fair Lending Laws and Regulations because we are state chartered bank that is regulated by FDIC. It includes a Fair Lending -Exam Scope. Is this the primary tool that I should be using to conduct a Fair Lending review regarding our residential loans?

I would start with these:

http://www.ffiec.gov/PDF/fairlend.pdf

http://www.ffiec.gov/PDF/fairappx.pdf

http://www.consumerfinance.gov/guidance/supervision/manual/ecoa-narrative/

http://www.consumerfinance.gov/guidance/...ion-procedures/

Question about Fair Lending...whenever you are doing a Fair Lending Review, do you get all of your information from the HMDA LAR or just the majority of it? For other information needed thats not on the LAR, do you guys manually pull this information from files or from your LOS?

I guess what I'm looking at is what do the majority of you guys do to obtain the information to do your Fair Lending Review?

Thanks so much,
KT

I would do it the same as the examiners.

Pull the information from the HMDA/LAR or LOS (loan origination system) for the sample - use the files for validation and the loan/underwriting information. Go back to square 1 if the HMDA/LAR or LOS is inaccurate.

Complianceking - I would also look at your consumer auto and unsecured loans as well. The FDIC is beginning to look at those products for a fair lending comparison based on rates, fees, etc. They will look at whether you are treating those of a prohibited basis fairly. If you have an internal rate sheet, make sure it is followed and if there are exceptions to the pricing - the reasons are clearly documented in the loans files.

Oh and they also will want you to have a Fair Lending Risk Assessment to show what areas are low to high risk based on your Fair Lending Review findings.

Per our training session Wednesday that was conducted by the FDIC Regional head of Fair Lending:

They review consumer non-HMDA loans by running software to determine if the first name is male or female - thus establishing a sample for gender bias. They have software to review surnames to determine if they are hispanic - thus establishing a basis for racial bias.

They review commercial loans against your underwriting standards to see if there are any deviations and then try to determine if it is based on a prohibited basis. They can use geo-coding to determine if a majority of the business in that census tract are minority and they can determine from your geo-codes if you are lending in majority minority census tracts.

Of course, if you are offering dealer/indirect lending programs, that should be high on your risk rating. It has always been so for us. rRember, it doesn't matter if you are "buying" their paper. At the end of the day the bank is responsible for monitoring for negative trends. We have always ranked this area high risk and monitor frequently. All documented. Always got the regulatory blessing....