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Two primary laws govern fair lending practices:
Equal Credit Opportunity Act (ECOA) / Regulation B
ECOA, enacted in 1974, prohibits discrimination based on race, color, religion, national origin, sex, marital status, age, source of income, or whether a person exercises rights granted under the Consumer Credit Protection Act for any credit transaction.
Fair Housing Act (FHA)
The Fair Housing Act is part of the Civil Rights Act of 1968. The FHA makes it unlawful for any lender to discriminate in housing-related lending activities against any persons because of their race, color, religion, national origin, handicap, family status, or sex.
Dodd-Frank Act developments are tagged .
- Bureau Outlines Fair Lending Priorities for 2017 (12/16/16)
- HUD Launches CART, an Interactive Community Investment Tool (12/6/16)
- HUD Expands Fair Housing Protections (9/22/16)
On September 15, HUD published new guidance on how the Fair Housing Act protects individuals who are limited in their ability to read, write, speak or understand English (Limited English Proficiency (LEP)). Because there is a close relationship between national origin and the ability to speak English, possible fair lending issues arise. And, according to HUD, LEP can also arise with respect to other protected classes, including religion and disability.
This latest guidance expands on guidance and a set of FAQs that HUD issued in 2007 and that still apply. While the primary focus of this latest guidance is apartment rentals, it also clearly applies to mortgages. While the guidance does not require banks to offer translation services unless otherwise required by law or contract, it cautions against taking steps that would prevent a borrower from translating documents or bringing their own interpreter.
HUD’s action is consistent with other steps being taken by federal agencies intended to help those with LEP participate in mainstream commerce and daily life. Therefore, banks should be sensitive to transactions with customers or potential customers who are not proficient in English and be careful not to erect artificial or unnecessary barriers. Contact Rob Rowe for questions.
- HUD Issues Limited English Proficiency Guidance (9/15/16)
- Inclusive Communities Lawsuit Dismissed by District Court (8/26/16)
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- HUD Final Rule on Disparate Impact (2/15/13)
- Fair Housing Act
Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).
- CFPB Republished Rule: Equal Credit Opportunity - Regulation B (12 CFR 1002) (2011)
- CFPB Republished Rule: Home Mortgage Disclosure - Regulation C (12 CFR 1003) (2011)
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- Fair Lending - Revised Booklet (2010)
- OCC Guidance: Addresses for CRA and ECOA Notices, FHA Posters (10/11/11)
- OCC on Lending to Native Americans (3/29/06)
- OCC Bulletin 2005-9, Overdraft protection programs; Interagency Guidance (4/6/05)
- AL 2003-8, Financing Minority Businesses (10/24/03)
- AL 2003-3, Avoiding Predatory and Abusive Lending Practices in Brokered and Purchased Loans (2/21/03)
- AL 2000-10, Payday Lending (11/27/00)
- AL 2000-7, Abusive Lending Practices (7/26/00)
- OCC Bulletin 1997-24, Credit Scoring Models: Examination Guidance (5/20/97)
- AL 96-3, Fair Lending Pilot Testing Program (04/18/96)
- OCC Bulletin 1994-36, Fair Housing Home Loan Data System Final Rule (5/31/94)
- Banking Bulletin 1993-30, Joint Statement on Fair Lending Expectations (6/3/93)
- Banking Bulletin 1992-17, Guide to Mortgage Lending (03/31/92)
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