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#2273115 - 07/20/22 04:32 PM Targeted Marketing to LMI areas
Beacon Offline
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Joined: Dec 2021
Posts: 3
Do you see any fair lending risk for a targeted marketing campaign to businesses in LMI areas. The products marketed would be the bank's standard products, available to all small businesses and would not contain any higher cost features or rates. This would be done in an attempt to increase small business lending in low or moderate income tracts.

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Fair Lending
#2273125 - 07/20/22 05:41 PM Re: Targeted Marketing to LMI areas Beacon
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,912
Galveston, TX
The fair lending risk would be if you are not doing this when you are not getting the penetration that you would expect.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2273127 - 07/20/22 05:43 PM Re: Targeted Marketing to LMI areas rlcarey
Beacon Offline
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Joined: Dec 2021
Posts: 3
I am not sure I understand. Do you mean that it is more of a fair lending risk if we have low penetration of LMI areas for small business loans and we don't do targeted marketing just to these tracts?
Last edited by Beacon; 07/20/22 05:45 PM.
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#2273129 - 07/20/22 05:49 PM Re: Targeted Marketing to LMI areas Beacon
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,912
Galveston, TX
If you lack expected penetration into those tracts, how else are you going to prove that in some manner you are not redlining if you have identified that as a weakness and you are not doing specific outreach efforts?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2273168 - 07/21/22 12:08 PM Re: Targeted Marketing to LMI areas rlcarey
Beacon Offline
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Posts: 3
That is an excellent point! Thank you

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#2273176 - 07/21/22 12:55 PM Re: Targeted Marketing to LMI areas Beacon
Rocky P Offline
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Joined: Jun 2003
Posts: 7,441
Florida
Randy said a mouthfull! Makes my job easier now.
Identify your market.
Have appropriate products for the market.
Understand and market to the demographics! (Examples, even though circulated throughout the AA, an ad in e.g. "Realtor Today" magazine would not meet your LMI/minority targets if 95% of the properties are above $400k. Similarly , although a general community newspaper distribution covers a wide area, readership demographics may be significantly less. A marketing department asked a newspaper for readership demographics and it was determined that less than 10% of the readership was Black or Hispanic, despite being 50% of the populatuion.)
If marketing to other languages, make sure to have the ability to communicate with the applicants. Sending out ads in Spanish for example can be a costly mistake, unless there are employees and loan officers that can communicate and turn the materials into loans.
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