Fair Lending and Underwriting

Date Recorded: April 22, 2025
Presented by: Mark Burnside, CRCM, Director, Forvis Mazars, LLP

A two-hour webinar covering fair lending implications during underwriting, with a focus on recent cases.

Fair lending continues to be an important topic of concern for federal regulators. Financial institutions are prohibited from discriminating against persons on certain basis including race, color, religion, national origin, sex, and other factors.  Although this is a relatively straightforward concept, discrimination can occur in a number of different ways and employees may discriminate without consciously intending to do so. Financial institutions therefore are encouraged to be mindful about the potential ways discrimination can occur and train those involved in lending to spot the red flags.

This webinar will focus on the anti-discrimination requirements under the Equal Credit Opportunity Act (as implemented by Regulation B) and the Federal Housing Act, and how the process of discrimination may occur in underwriting. We’ll also discuss violations in a variety of underwriting contexts, which will provide guidance and practical examples for concerns that financial institutions should be on the lookout for. For HMDA reporters, we’ll discuss briefly how certain data points on the HMDA LAR may cause examiners to potentially believe there are discriminatory concerns.

HERE IS WHAT YOU WILL LEARN:

• Equal Credit Opportunity Act/Regulation B prohibited basis
• Fair Housing Act prohibited basis
• Methods of discrimination
• Examples of ways in which institutions discriminate in underwriting
  • Information requested/obtained (e.g., spousal information)
  • How information is evaluated
• How discrimination shows itself
  •  Approvals/denials; Increased rates or fees
  •  Frequency of withdrawn/incomplete files
  •  HMDA LAR
• Importance of understanding the risk in providing exceptions or considering compensating factors
• Key points and best practices
• Variety of recent fair lending violations