Fair Lending/Nondiscrimination Analysis
FORVIS can conduct a fair lending/non-discrimination assessment of the adequacy of the bank’s written policies and procedures established to ensure equal treatment for all credit applicants; furthermore, our professionals can assess whether loan officers adhere to principles of fair lending without consideration of the “prohibited basis.” At the conclusion of the assessment, FORVIS will be positioned to provide management and the Board with an objective perspective on the bank’s fair lending procedures by comparing application qualifications and outcomes. Before analysis begins, we can conduct a risk assessment designed to help confirm the focus and size of analysis to be conducted.
When conducting this risk assessment, our professional will follow guidelines similar to those utilized by the federal regulatory agencies and will consider:
- The quality of general underwriting guidelines
- The variety, complexity, and introduction of new product offerings
- Growth of specific loan products
- Turnover of key compliance or lending personnel
- Past scheduling and content of fair lending-related training
- Criticisms or recommendations identified during previous regulatory compliance examinations
- After completing the initial risk assessment, we will confer with members of the compliance team and management to explain our conclusions and finalize the selection process for the analysis.
We will then conduct the nondiscrimination assessment, which usually focuses on commercial, consumer, or real estate transactions consummated within the past six months. We will conduct either an underwriting or terms and conditions comparative assessment.
We also will assess:
- The institution’s mission statement with respect to fair lending practices
- The use of overrides or exceptions to bank policy
- Collection policies and practices
- Customer service procedures as to whether applicants are consistently treated courteously and encouraged to complete applications
- The bank’s advertising/marketing strategy
- Procedures to respond to consumer complaints and to implement corrective actions associated with regulatory matters
- If Commercial transactions procedures are in place to assure compliance with spousal guarantee rules of Section 1002.7(d) of the Equal Credit Opportunity Act/Regulation B.