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All For One And One For All

A few weeks ago the FFIEC held their annual Fair Lending Hot Topics webinar. If you have never listened into one of these, what happens is a group of prudential regulators all get together and tell us what we need to be looking out for. If you didn’t get the chance to attend, you can go here to find a recording of the webinar. You can also download the slides as well. I am not planning on doing a thesis on what they covered, but I do have a few quick points to touch on.

  1. Yes, HMDA is still coming. The Deputy Fair Lending Director of the CFPB’s Office of Fair Lending and Equal Opportunity covered a few things that you need to pay attention to. First, the error resubmission process has changed. If you haven’t had a chance to take a look at the new guidelines, I highly recommend that you do. This is how the examiners will be looking at your data, and it is a good double check for you right before you submit. Remember that HMDA errors are one of the biggest triggers for Fair Lending exams. As I mentioned in a previous blog, you will also want to take a look at the joint guidance from the OCC, FDIC, and FRB on prioritizing 37 key fields. They will also be publishing a new “Getting it Right” guide here shortly.
  2. Matthew Nixon of the NCUA covered the pit falls of offering a Special Purpose Program under Regulation B. A special purpose program is an incentive program that is offered to an “economically disadvantaged class or persons”. With more and more credit unions offering these types of programs, it is important that the proper due diligence goes into building, executing, and monitoring these programs. If this is something you are doing today, or are looking to do in the near future, I would fast forward to Mr. Nixon’s section of the presentation.
  3. A question was asked of the NCUA on if indirect auto lending is included within the NCUA’s Fair Lending exam. Mr. Nixon of the NCUA stated that a minimal review of indirect auto lending is done on all exams, but it may be considered a focal point of the exam based off certain factors. Those factors are: indirect auto dealers’ compensation structure, complaints received, input from district examiner, and compliance monitoring practices of the indirect program.
  4. HUD also addressed a few key take-a-ways that seem to be common sense, but are still occurring frequently. They presented some of their top lending complaints received over the past year, and there are two in particular that I want to highlight. First, the requiring of a co-signer for someone with disability income. Remember that under Reg B you cannot require that someone have a co-signer. Second, you cannot require a parent to return to work from parental leave in order to use their income. This has always been a big No-No.
  5. Finally – CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS, CMS.

So I know these might not be “quick” points, but I think they are good non the less. If you can listen to the whole webinar I would highly recommend it. Don’t go into it with the mindset that because it is a different regulator, it doesn’t apply to me. You would be surprised with how much these regulators share, and how similar their methodologies and practices are.

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