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#1984626 - 12/22/14 05:58 PM Fair Lending Review
Piano Man Offline
Gold Star
Piano Man
Joined: Mar 2004
Posts: 442
Down South
Fair lending reviews cover all applicants whether business or consumer correct? Our bank is reluctant to establish any pricing guidelines for business loans, as there are "too many variables" to consider in the decision. I keep asking, then how do I as the reviewer of fair lending, see that no desperate treatment was made on one of the prohibited basis if nothing is documented. Do any of you have any suggestions? It was also stated that regulators don't look at business loans that close, just consumer loans.
Love so amazing, so divine; Demands my soul, my life, my all.

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Fair Lending
#1984752 - 12/22/14 10:16 PM Re: Fair Lending Review Piano Man
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,509
Some banks have quantified factors such as length of account relationship, deposit balances, similar borrowing experiences, etc.

IMHO, make sure they're quantified. A deposit relationship is different for one with an overdraft to one in the 6 figure range. Same for borrowing. An unused $5,000 credit card is a borrowing relationship, so is a $250K loan paid as agreed.
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#1994983 - 02/10/15 07:43 PM Re: Fair Lending Review Piano Man
Soccerdad Offline
Joined: May 2004
Posts: 80
IL: Will
Piano Man, I would not focus on pricing for your small business FL analysis. Instead focus on eliminating any unfair spousal guarentees (consider spouses role (if any) in the company and evidence of intent to apply jointly). Also, spend time creating and/or reviewing board level loan exception reports to identify any permitted exceptions to your current loan policy. Then, review for any small business feedback or complaints. Finally, periodically monitor your denials to see if you are denying any female or minority owned firms "inside" any recently made prior exceptions. For example, if you made an exception 3 months ago to allow for a lower debt service coverage 1.20 vs. your standard 1.25 ratio, then monitor for women or minority owned commercial denials with DSC btw 1.20/1.24 and document any and all compensating factors.

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