Can a consumer be declined for credit when they qualify for the credit or if they have been approved for credit at the institution previously?
Situation - Applicant has applied several times for credit with the financial institution. All loans have been paid according to terms on the two loans currently on the books. Prior paid off loans always paid off as agreed. Never any late pays. The bank approved the two prior loans with their credit score in upper 500 range due to a deed in lieu of foreclosure on a previous property. The applicant has now increased their score to upper 600's to lower 700's depending on which credit report you look at. There are no past dues on their CB reports other than the deed in lieu from a couple years ago. Their DTI ratio is within policy guidelines with the bank. The one of the loans on the books has two policy exceptions that were already approved and being tracked. The same applicant applied to increase this particular loan and extend out one more year. The bank declined them; however has not yet given them a reason why. Can this be considered a fair lending issue since they qualified with income and due to bank already approving prior loans with the above mentioned exceptions? The same two exceptions would exist on this new loan with no new exceptions to mention. Seems like discrimination to me.
If a bank targets a high net worth geographical are for a marketing campaign, are they up against any regs? Can someone define "Greenlining" please?
The ECOA came out last year stating that creditors cannot discriminate on the handling of credit report fees on the basis of marriage. The two companies that we pull credit reports from do not charge differently if we pull a single report or a joint report. Where we think that we see a possible concern when we have 3 borrowers on a loan (2 married and 1 parent). The parent will be charged the same as the joint children. Is this a potential discrimination? Please clarify for us when an application is really considered a joint application. Is there any guidance out there? When should we be using 1 application verses 2 applications or 2 verses 1? Any guidance would be greatly appreciated.
Does the Fair Lending Act limit the ability of a bank to use age as a targeting tool in direct marketing for loans?
We currently sell loans to the secondary market. Since the loans take considerable time, we would like to set a minimum loan amount. Will there be any discrimination issues if we change our loan policy concerning secondary market loans to read that we will only process loans for the secondary market in excess of $50,000 or perhaps charge a fee if the loan is under a certain amount?
Would direct marketing to seniors for reverse mortgages be in violation of ECOA due to advertising to a particular group of people, in this case, age-related?
In the Guru Q&As Compliance Section of the Weekly Banker Briefing dated 3/25/2007, a question under the topic of <a href="http://www.bankersonline.com/compliance/guru2007/gurus_comp032607c.html">"Loan Denied to Illegal Alien-Adverse Action?"</a> piqued my curiosity. I agree with the gurus' assertion that an ECOA AAN is required and as credit is never pulled, obviously, FCRA is not a factor. I do, however, question the following: <ol><li>Isn't the OSC [202.6(b)(7)(1)] referring to resident and non-resident alien status, not ILLEGAL status? <li>If the FI is denying ALL ILLEGAL applicants, how does that have any bearing on National Origin? (Yes, I know, "ALL" is a huge word)</ol>Also, I'd make a call to ICE upon learning of the illegal status.
If two individuals have equal credit and other factors and one is granted a loan due to a non-bank related personal or business relationship with a bank officer, is this considered discriminatory from a fair lending/HMDA standpoint?
What happens to a loan if the cosigner passes away? Does the loan go into default or need to be re-applied for?
If a bank declines a loan application because the applicant has exercised his right to file for bankruptcy would this be considered a violation of Reg B?