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Maternity leave and fair lending

Question: 
How can a lender mitigate fair lending risk if a credit applicant is on maternity leave at the time of the application?
Answer: 

The FRB has offered the following steps to assist a lender in mitigating its fair lending risk by:
o Not assuming that a woman will not return to work after childbirth;
o Using underwriting policies that treat applicants on maternity/parental leave and applicants on other types of leave similarly;
o Consulting with its investors to understand the requirements for considering and verifying the income of an applicant on maternity/parental leave;
o Reviewing and addressing complaints by consumers who were on maternity/parental leave at the time of the application; and
o Reviewing recent settlements to learn about problematic practices.

Learn more about Patricia’s webinar Fair Lending Hot Topics - Don't Get Burned!.

First published on 04/24/2016

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