One of our lenders asked if he is able to provide yard signs to his realtor contacts to place on their listed properties for sale. I think it is a great marketing idea. The sign would state something to the effect of “Financing Available through “XYZ Bank” for qualified applicants. Please contact [loan officer name and phone number] or stop in at our ABC location to complete an application.”
How much "teeth" does UDAAP really have to penalize a bank?
Our bank would like to engage in an affinity program with several large companies in our community. The program is intended to offer secondary market purchase money mortgage loans with discounts, such as: waived origination fees and a lender credit of $500 to be used toward third party origination costs. We do not have any partnerships/ownership stake with our third party vendors. Once established, the program incentives will be offered to any employee of the company regardless of salary level, full-time versus part-time, tenure, etc. Of course, all normal credit policy guidelines apply before final approval is determined. We are a small community bank with approximately $650 million in assets.
My questions are:
1. Should we be concerned about any fair lending, ECOA or UDAAP violations as a result of our special program offered only to specified borrowers?
2. How should we document the program to avoid any concerns of disparate treatment?