The lending department updated its Loan Rate Guide and there is a statement on the guide to the effect that rates may be lower if an existing customer has an "excellent" credit score. Lenders are to check with management for the rate. In order to avoid any fair lending issues shouldn't the bank be more specific on what constitutes an "excellent" credit score?

YES!!!!

Not only should the reasons and paperwork be documented, it should not be ambiguous as to excellent. For someone used to subprime lending, a 660 is excellent, other times, I've seen 720 and 750 mentioned.

Explain to an examiner doing a rate and terms review why one person with a certain credit score got a break and an identical credit score did not. What about if the one that did not get the lower rate was a protected race/ethnicity or female? One specific policy and no exceptions is usually the best. *

* The policy can have breaks for multiple accounts, auto pay, high credit score, etc. but it applies automatically to all, and the reasons documented.

Thanks Rocky for your response.

Welsh - we had fair lending issues during our most recent FDIC exam due to similar issues. You should have rate sheets that spell out all issues. Ours are split out by credit score ranges.

Thanks Skittles for the heads-up.