Small credit unions should be just as concerned as large ones about violating the Equal Credit Opportunity Act, said CUNA Mutual Director of Regulatory Compliance Bill Klewin.
Many are familiar with the Department of Justice’s suit against former mortgage giant Countrywide, but Klewin told a CUNA Mutual compliance webinar audience on Wednesday that the DOJ’s Civil Rights Division also pursued discrimination charges against the $69 million Nixon State Bank of Nixon, Texas.
“It doesn’t matter how large or small you are, if you are violating ECOA, the Justice Department will look at you,” Klewin said, adding that litigation could be “extremely destructive to your reputation.”
Complaints to the Justice Department usually come from federal or state regulating agencies, Klewin said, but the DOJ could investigate discrimination complaints against credit unions it receives from the CFPB or any source.
The reminder to credit unions to take fair lending laws seriously comes on the heels of a Consumer Financial Protection Bureau compliance bulletin, issued Tuesday, that said the agency will apply an “effects test” to monitor the institutions it supervises, and will keep an eye open for fair lending violations , intentional or not.
