The NCUA on Tuesday released a letter to credit unions thatdetails the regulator's new fair lending tools it hopes will helpfederal credit unions comply with fair lending laws. The letteralso explains the factors used to determine which federal creditunions will receive a fair lending exam or offsite supervisioncontact.

Although the NCUA did not issue fair lending laws, the regulatorsaid it does supervise and enforce the rules, including the EqualCredit Opportunity Act, the Home Mortgage Disclosure Act and theFair Housing Act.

As in past years, the NCUA will select some federal creditunions to receive a fair lending examination.

“Federal credit unions that will be selected for a fair lendingexam or offsite supervision contact will have demonstrated thepotential for a higher fair lending risk,” NCUA Chairman DebbieMatz said in the letter.

Factors used to select credit unions for the exam includelending practices that fall outside normal terms for pricing,denial, withdrawal or lending terms, according to the creditunion's annual Home Mortgage Disclosure Report.

The agency will also look for fair lending violations, generalcompliance risks and other factors, such the potential for higherfair lending risk due to mortgage volume, loan types orcomplexity.

In addition to an onsite exam, the NCUA said federal creditunions that demonstrate the potential for higher fair lending risk,but are not HMDA outliers, could be subjected to an offsite fairlending supervision contact.

“If an offsite supervision contact indicates the possibility ofdiscriminatory practices or significant findings of non-compliancewith fair lending laws or regulations, a federal credit union willbe considered for a fair lending exam during the next exam cycle,”Matz said.

The letter also introduces a new Fair Lending Guide, developedby the NCUA's Office of Consumer Protection. The NCUA alsoannounced it has scheduled a free webinar on the topic forThursday, April 4, at 1 p.m. EDT.

During the webinar, OCP Director Gail Laster and OCP staff will review the NCUA's fair lendingexamination program and the new lending guide, and will share fairlending best practices for credit unions. Registration is open andavailable online.

Participants may submit questions via email in advance to[email protected]with the subject line “Fair Lending Webinar”.