Couldn’t edit, but the loan policy should provide guidance, again as a benchmark to ensure uniformity and mitigate fair lending risk.
To what extent will examiners challenge? During a comparative file review from he’ll, (1,756 files), they were testing bankruptcy. There were 2 HIP loans flagged as a “matched pair “. Policy said no loans to bankrupt within 3 years. A Black male was denied for a $10k HIP loan, while a White male was approved for a similar amount. Both had bankruptcy within the 3 year period.
Differences? Black applicant was renting, while White applicant secured the HIP with a $30k certificate of deposit. Fortunately, policy also indicated that loans amply and entirely secured by negotiable collateral under the banks control could be made with a SVP’s approval. Had that not been in policy, the EIC indicated that despite the collateral issue, they would have cited the bank for differences in treatment. Whether or not it stuck would be a different story though.
Integrity. With it, nothing else matters. Without it, nothing else matters.