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#31529 - 09/06/02 05:42 PM Fair Lending Question
Anonymous
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Our marketing department is wanting to give a gift certificate to borrowers that open a home equity line of credit during a specified period of time. However, they are only wanting to offer this promotion at one particular branch, which happens to be in/near a wealthier part of town. Could there be a fair lending concern because the offer is just being made in one branch and should we extend the offer to all branches in our metropolitan area?

I would appreciate any insight!

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Lending Compliance
#31530 - 09/06/02 06:06 PM Re: Fair Lending Question
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 46,840
Bloomington, IN
I personally see a fair lending problem here. If you’re offering a gift certificate (for a loan product) to the customers of that branch but not your other branches, what is the circumstance (outside of the location to the "upper class" side of town) that affords them the gift certificate and not your other customers?

I guess you could argue that all of your customers have the opportunity to visit that branch, but I wouldn’t want to defend it.

I advise not doing it.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#31531 - 09/06/02 06:22 PM Re: Fair Lending Question
mmason Offline
Gold Star
Joined: Nov 2001
Posts: 447
New England
Along with the fair lending concern is the bank's image. You would have to disclose in all your marketing that the certificates are available at one branch only, what image will that give to potential customers in other areas who see/hear the ad? Why have a promotion if you're not going to advertise and yet advertising IMO is just asking for complaints from new and existing customers.

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#31532 - 09/06/02 08:16 PM Re: Fair Lending Question
ahou Offline
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ahou
Joined: Aug 2002
Posts: 3,094
I agree that you have a Fair Lending problem here.
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Opinions are my own and not of my employer.

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#31533 - 09/06/02 10:41 PM Re: Fair Lending Question
CarlD Offline
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CarlD
Joined: Apr 2002
Posts: 215
Couldn't they be more subtle?

The gift certificate could be for admission to a polo match or to get their tires rotated at the Mercedes dealer.
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#31534 - 09/06/02 10:56 PM Re: Fair Lending Question
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 46,840
Bloomington, IN
But, I prefer NASCAR and I drive a Dodge Truck! LOL (not Life of Loan)

Anon, hope you don't take offense to our attempt at humor, but I do applaude you for bringing the potential problem to your marketing staff and CYBA.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#31535 - 09/09/02 02:52 PM Re: Fair Lending Question
Anonymous
Unregistered

No offense taken. There must be humor in this line of work to keep us half sane. I had already told them I didn't like it but wanted to get other opinions as well since I know I'm going to get to discuss my reasons at length over and over and over again.

Thanks!

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#31536 - 09/11/02 06:58 PM Re: Fair Lending Question
Anonymous
Unregistered

Is everyone's answer the same if the gift certificate is to a mall and that one branch is in the parking lot of that mall?

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#31537 - 09/11/02 07:25 PM Re: Fair Lending Question
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 46,840
Bloomington, IN
Yes, don't your other branch loan customers have access to the mall.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#31538 - 09/11/02 08:36 PM Re: Fair Lending Question
ahou Offline
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ahou
Joined: Aug 2002
Posts: 3,094
You still have the basic problem of appearing to discriminate. Why are you targeting that particular branch?
_________________________
Opinions are my own and not of my employer.

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