Fair Lending Compliance - Some Red Flags


The Consumer Financial Protection Bureau (CFPB) will make Fair Lending a focus of its examinations.

I have written extensively on these examinations.

Our firm is committed to providing comprehensive audit and due diligence reviews in preparation for the CFPB's Nonbank and Bank Supervision and Examination.

And my firm has offered, freely, a Compendium of all parts and each section of the Examination Manual.

Our Compendium provides:

-Directory: All Sections

-Contents: Links to Compendium Text

-Contents: Links to CFPB Website Text

In preparing our Audit and Due Diligence procedures for our clients, we have combined all three parts into a single Directory with links to each section's Compendium texts and CFPB's website texts. There are over 700 pages in this Compendium.

A central feature of the CFPB exam is the review of a company's Fair Lending compliance.

In preparing your firm for a CFPB examination, it is important to explore how Fair Lending is practiced by your firm.

The term "Fair Lending" has been around for many years and is used as a catch-all phrase for several regulatory compliance requirements.

Let's consider four areas affecting Fair Lending compliance - areas to which financial institutions sometimes do not give sufficient consideration.

I will provide a brief list, grouped by category, and suggest some potential risks that should be considered.

The list is not meant to be comprehensive - I have chosen just four categories - but this exercise should guide you toward expanding the scope of your Fair Lending initiatives.

Please keep in mind that state banking department examiners and federal prudential regulators will also look for these potential infractions when conducting examinations.





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