Regulators Ramping Up Fair Lending Enforcement
The NCUA and Consumer Financial Protection Bureau have placed more emphasis on Fair Lending laws and Home Mortgage Disclosure Act data collection in 2013, and credit unions can expect additional rules and exams in 2014.
Some are also anticipating the anti-discrimination reporting and compliance could be expanded to apply to auto financing, business loans and credit cards, which could change the way credit unions lend to members.
NCUA Director of Consumer Compliance Policy and Outreach Tonya Sweat said the regulator, which must follow the same fair lending procedures as other regulators, does not take field of membership limitations into consideration when reviewing HMDA data and other factors to determine if a fair lending exam is necessary. During an April 2013 webinar on the topic, she also said that a credit union’s status as a HDMA outlier would make the difference between the NCUA conducting an offsite supervision contact or onsite fair lending exam.
“I'll have to be honest with you, the data we are looking at and the comparisons that we make include the data that is filed by banks and others who are required to file under the Home Mortgage Disclosure Act,” Sweat said during the webinar. “So I know some people might be thinking are we only looking at federal credit unions exclusively when we're determining HMDA outliers, and the answer to that is 'no.'”
In a question and answer sheet released with the NCUA’s Fair Lending Guide, the agency said during offsite supervision, Office of Consumer Protection staff would review the credit union’s lending policies, procedures, training program, audit or verification assessments, compliance risk assessment, and marketing or advertising program or materials. At the conclusion of the supervision, the NCUA would provide in a conference call an oral report of findings and recommendations to senior management and officials. Federal credit unions would also receive a written report of the results within three to five business days of the call.
A fair lending exam would require credit unions to prepare items listed by the NCUA in its notification letter. The exam would also include a loan officer questionnaire, information about products and services and data in an electronic format detailing approved and denied loans.