Compliance Blog

Written by JiJi Bahhur, Director of Regulatory Compliance

Last week, the Consumer Financial Protection Bureau (CFPB) released a fair lending report to Congress that highlights its enforcement actions under the Home Mortgage Disclosure Act (HMDA) and Equal Credit Opportunity Act (ECOA) during an 18-month period (July 21, 2013 – December 31, 2013).  Fulfilling part of its fair lending mandate under the Dodd-Frank Act, the CFPB’s report gives Congress an update on the bureau’s fair lending-related efforts and outlines key priorities for its supervision and enforcement work.

If you don’t have time to go through the entire report, take a look at the Executive Summary; it provides a quick run-down of the CFPB’s “key developments” in fair lending.  Below, you’ll find just one of a number of “key developments” the CFPB lists in the Executive Summary:

“Guidance on supervisory reviews.  The Bureau publicly released information about the methods our examination teams use to conduct three types of fair lending supervisory reviews: ECOA Baseline Reviews, ECOA Targeted Reviews, and HMDA reviews.  Through these supervisory activities we detected some violations of ECOA and HMDA; we also found that many lenders have instituted and maintained strong fair lending compliance management systems (CMS) and had no violations of ECOA and HMDA.  Using the guidance issued by the Bureau describing these reviews, lenders may self-assess their own compliance with ECOA and HMDA.  We also provided guidance to industry via Supervisory Highlights and Bulletins discussing fair lending topics.” (My emphasis added).

Although the CFPB only has examination authority over credit unions with assets of $10 billion or more, its supervisory focus affects credit unions of all sizes; and as the “key development” above states, the CFPB’s guidance and reports such as its fair lending report, serve as means for credit unions of all sizes to stay compliant with federal consumer financial laws such as the HMDA and ECOA. 

You can access the CFPB’s latest fair lending report here. 

Also, for more information on the bureau's work on fair lending, take a look at this CFPB blog.  Here's a snip-it:

"We’ve also carried out some recent enforcement actions for violations of ECOA and/or HMDA against:

• Two mortgage lenders for significant errors in their mortgage loan application data
• A credit card company for several violations of consumer protection laws, including unlawfully discriminating against card applicants on the basis of age.
• A mortgage lender for charging higher prices on mortgage loans to African-American and Hispanic borrowers than similarly creditworthy non-Hispanic white borrowers
• An indirect auto lender for harming minority borrowers who were charged higher interest rates than similarly creditworthy non-Hispanic white borrowers.

Additionally, we’ve released important information about fair lending, which we hope will benefit consumers, advocates, and industry. We introduced our HMDA Database, which allows the public to study trends in the mortgage market across the nation and in their own communities. We also released two fair lending bulletins to help consumers and industry stakeholders recognize fair lending and access to credit risks in the home mortgage and auto lending markets. And, we’ll continue to work with industry and trade representatives, fair lending, civil rights, consumer and community advocates to make sure that consumers know their rights and that lenders know how to comply with the rules."

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Also released last week, NAFCU’s May Compliance Monitor is available here (NAFCU login required).  This month’s featured articles include:

• NCUA Exam Spotlight: Private Student Lending
• Cybersecurity: Protecting Credit Unions from the Modern Day Butch Cassidy and His Gang

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Last, but definitely not least (at least in my book), I’d like to kick off the week by sharing some photos of my kiddies from this weekend.  It was beautiful this past weekend in the D.C. area and I know my family took full advantage of getting some much needed Vitamin D.