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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 .
Recent DevelopmentsThe BasicsGuidance EnforcementCommentary
- HUD Final Rule on Disparate Impact (2/15/13)
- CFPB Sends First Fair Lending Report to Congress (12/6/12)
- CFPB, Justice Agree to Coordinate Fair Lending Enforcement (12/6/12)
- 2012 Data on Median Family Income Now Available (9/24/12)
The Federal Financial Institutions Examination Council (FFIEC) released the 2012 Median Family Income (MFI) data. This data incorporates information from the U.S. Census Bureau’s American Community Survey (ACS). The FFIEC announced last year that it will start incorporating ACS data into the FFIEC-published census data file. ACS is believed to be more reliable because it provides local communities with reliable and timely demographic, social, economic, and housing data each year.
- FFIEC Announces Availability of 2011 HMDA Data (9/18/12)
The Federal Financial Institutions Examination Council (FFIEC) announced the availability of data on mortgage lending transactions at 7,632 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). Covered institutions include banks, savings associations, credit unions, and mortgage companies. The HMDA data covers 2011 lending activity — applications, originations, purchases and sales of loans, denials, and other actions related to applications.
- ABA Urges End to ‘Disparate Impact’ Fair Lending Enforcement (7/19/12)
In a letter to federal banking regulators, the Justice Department, and the Housing and Urban Development Department, ABA urged federal government agencies to stop using a “disparate impact” approach to fair lending supervision and enforcement. The letter included an ABA-commissioned white paper by Buckley Sandler LLP that concluded such an approach – which holds lenders liable when neutral policies disparately affect minorities – lacks statutory authority.
- Fair Lending Toolbox Released on May 16, 2012
- DOJ Files Legal Action against Mortgage Company for Lending Discrimination (4/2/12)
The Justice Department and the U.S. Attorney's Office for the Southern District of New York filed a lawsuit against New York-based company, GFI Mortgage Bankers Inc. for violation of the federal fair lending laws. GFI allegedly engaged in a pattern or practice of discrimination by charging African-American and Hispanic borrowers higher interest rates and fees on home mortgage loans compared to similarly-situated white borrowers. GFI's lawyer said the company plans to contest the charges. "GFI regrets DOJ's unwillingness to settle this matter on reasonable terms," Andrew Sandler, the chairman of BuckleySandler LLP, which represents the defendants, said in an interview. "It will vigorously defend these legally vulnerable, statistically based disparate impact claims." See http://www.americanbanker.com for the full story entitled 'Mortgage Lender to Fight Back Against DOJ Fair Lending Suit' by 'Kate Davidson' published on April 3, 2012.
- News Releases and Reports from Justice Department's Fair Lending Page
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- Regulation B
- Regulation C (HMDA)
- 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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- FIL-74-2010, Fair Lending Teleconference on Fair Lending Issues (11/3/10)
- FIL-58-2008, Home Equity Lines of Credit Consumer Protection and Risk Management Considerations When Changing Credit Limits and Suggested Best Practices (6/26/08)
- FIL-44-2008, Third-Party Risk Guidance for Managing Third-Party Risk (6/6/08)
- FIL-148-2008, FDIC Teleconference on Conducting a Fair Lending Risk Assessment(12/30/08)
- FIL-14-2005, Payday Lending Programs Revised Examination Guidance (3/1/05)
- FIL-52-2005, Supervisory Insights Journal Summer 2005 Issue (6/27/05)
- FIL-9-2002, Spousal Signature Provisions of Regulation B (2/4/02)
- FIL-20-99, Guidance on Subprime Lending (3/4/99)
- FIL-94-99, High Loan-to-Value Residential Real Estate Lending (10/1999)
- FIL-35-96 (Revised), Mortgage Loan Prequalifications (7/3/96)
- 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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