Fair Lending Practices That Should Be Put In Place
March 17, 2022 BY MQMR Blogger
As a mortgage lender, what are some common Fair Lending practices that should be put in place?
Below are three practices a mortgage lender should put in place when it comes to Fair Lending compliance:
- Implement a comprehensive Fair Lending Program, including each of the following elements:
a. Implement an enterprise-wide Fair Lending Policy/Program, and update it annually, or more often as needed.
b. Designating a Fair Lending Officer for the organization.
c. Creating a Fair Lending Committee, with representatives from Executive Management and/or the Board of Directors. The Committee would address items such as:
i. Status and results of company-wide Fair Lending training.
ii. Review Fair Lending data analysis reports to ensure all applicants are being treated fairly.
iii. Monitoring transactions for potential Fair Lending issues.
iv. Performing Quarterly Fair Lending Data Analysis.
v. Develop and memorialize remediation plan(s) if fair lending assessments/reviews indicate a protected class has been adversely treated, including updating policies, procedures and/or internal controls.
vi. Consumer complaints and/or litigation that involve allegations of discrimination.
- Require Annual Fair Lending Training for all Employees, both at the time of hire and on an at least an annual basis.
i. Training should be completed by Executive Management and the Board of Directors as well.
- Review of marketing initiatives and materials from all mediums, to ensure that applicants from all racial, ethnic, gender, and age groups are encouraged to apply for credit.