CRA public report with RESPA allegations?

Our CRA public evaluation (we got a “Satisfactory”) written by the FDIC includes extremely negative FDIC commentary that is (arguably) not relevant to our CRA evaluation, but was instead shoplifted from our compliance exam! What gives? Is that normal? Does FDIC typically comment on their critical views of your lending compliance efforts outside of CRA, in a public CRA disclosure?

Specifically, the report contains a section called “Discriminatory or Other Illegal Credit Practices” and makes the allegation that “illegal credit practices” contrary to CRA goals exist, pertaining to RESPA Section 8. I thought that findings of that nature were more or less private, between the bank and its regulator. I’m very surprised that the FDIC would have crammed this into a public CRA disclosure that we are required to share with the public upon request. I am also wondering if the fact that the bank fought these findings for 4 months played into the decision to shoehorn that comment into a CRA report.

If you look at the CRA Public Evaluations, there is a comment on Fair Lending in every one! Lucky you did not get downgraded.

A fair lending examination is usually done concurrently with CRA. While CRA looks at LMI reacts and individuals, the ECOA/FHAct part looks for redlining and differences in treatment on a prohibited basis (majority-minority tracts rather than income).

Every CRA PE will include a section for Discriminatory or Other Illegal Credit Practices. I can't find the FDIC reference but the OCC includes this list of illegal credit practices that are considered in CRA PEs.

(1) Discrimination against applicants on a prohibited basis in violation, for example, of the Equal Credit Opportunity Act or the Fair Housing Act;

(2) Violations of the Home Ownership and Equity Protection Act;

(3) Violations of section 5 of the Federal Trade Commission Act;

(4) Violations of section 8 of the Real Estate Settlement Procedures Act;

(5) Violations of the Truth in Lending Act provisions regarding a consumer's right of rescission;

(6) Violations of the Military Lending Act; and

(7) Violations of the Servicemembers Civil Relief Act.

In addition to Inspector's list, there have been banks that received downgrades for Regulation E violations and UDAAPs.