Is there a mandatory regulatory requirement for Fair Lending Training?

I know of NYSDFS Industry Letter 296-a where it states in part 3:

The plan should implement a training program that provides adequate training to new hires and current employees, including management and other key personnel, and provides lending personnel with at least semi-annual updates on fair lending issues. Compliance personnel should administer and conduct the training program and participants should certify that they understand and commit to upholding the principles of Executive Law §296-a and the policies and procedures contained in the Plan;

However, is there another regulatory requirement for Fair Lending Training for the CFPB or FDIC? Or is it just a best practice?


Thanks.

OCC (Training is mentioned 15 times in the Fair Lending Examination manual – some include

- Compliance program materials (particularly fair lending policies), training manuals, organization charts, as well as record keeping and any monitoring protocols, and internal controls.

- The bank’s own compliance program and previous examination findings may indicate system weaknesses that could lead to discrimination. Therefore, review information from examination work papers, bank records, and any available discussions with management representatives in sufficient detail to understand the organization, staffing, training, record keeping, auditing, and policies and procedures of the bank’s fair lending compliance systems.

- Compliance Risk Factors:
C-7 Fair lending training is nonexistent or weak.

- NOTE: The items above are not compliance measures, but they are fundamental features of lending that tend to work against disparate treatment.
b. Do training, application-processing aids, and other guidance correctly and adequately describe:

􀁆 Prohibited bases under ECOA, Regulation B, and the FH Act?
􀁆 Other Regulation B substantive credit access requirements (e.g., spousal signatures, improper inquiries, protected income)?

Thank You. As usual, some bank management pushes back on why are they receiving this training annually and sometimes saying "best practice" or "recommended" is not a sufficient answer for them because they are "too busy, and it is not really applicable to them or their department" so the best way to counteract this is to show a regulatory "requirement" such as NYSDFS 296-a Industry Letter.

That is why I was asking if anyone knows of a FDIC or CFPB requirement specifically like 296-a. I will still quote examination manuals etc., but wondering if I can quote something else besides manuals.

The FDIC has a whole page dedicated to Fair Lending:

https://www.fdic.gov/resources/bankers/fair-lending/

These resources have fair lending training references sprinkled throughout them. I'm guessing they find it to be pretty important! LOL!

OCC came out with their new Fair Lending Exam Manual yesterday. I strongly suggest that you look at it if you are not an OCC bank. There is a lot at stake. Just do a scan for training............ (agencies have a tendancy to try and outdo each other.)

https://occ.gov/publications-and-re...les/fair-lending/index-fair-lending.html

I had been told in the past by an FRB examiner that Fair Lending training should be given to all staff. Their reasoning was that a customer could enter the bank and inquire about a loan, and the teller, or customer service rep could make conclusions based on appearance, what they might know about the person, etc, and try to deter them from talking to a loan officer. We provide Fair Lending training to all staff.

One question is, is fair lending training required? Yes, practically speaking. There should be fair lending training and it differs by responsibilities. On the comment above, a teller should point the inquiry to a lender/loan staff, period. They would require a lot of training if they were to discuss terms and qualifications. In a small bank where a teller is a fill-in lender, more training is needed. So it's good for all to be familiar with it as it is also a part of "fair banking" and avoiding risk and UDAAP issues.

But not training is not a citable violation. If the teller or someone else violated a requirement of fair lending laws or regulations, that is citable. Not training is not citable and not required in the federal laws.

It's like policies. There are few that legally required. There are many that a bank needs and would be foolish to operate without. The absence of some policies may be mentioned as contributing factors to violations found. But not having a non-required policy, or training wouldn't be a citation.

If you don't have fair lending training, or if your training is found to be inadequate, you are likely to be cited for an inadequate compliance management system. In addition, if you have any other fair lending issues, the lack of training will be used as an add-on factor.

Andy and InFairness, agree 110%. That's what I was trying to allude to.
Even if there are no fair lending issues, the bank will be potentially criticized, under the Compliance Management part.
If there are fair lending issues, management cannot find a safe haven to hide, especially if training "could" have prevented the issue - it could be considered wilfull neglience, for the compliance officer, management and the board.