The CFPB as well as other federal regulatory agencies have stepped up the level of fair lending examination scrutiny; the expanded coverage has led to a surge of fair lending settlements. The frequency of enforcement actions, the size of restitution to consumers, and the regulatory penalties assessed against financial institutions has grown exponentially in recent months. Penalties are far reaching! In September 2013, the Department of Justice announced that Capital One will pay $2.85 million regarding Chevy Chase Bank’s pattern or practices of discrimination against African-Americans and Hispanic borrowers between 2006 and 2009. Examination CRA ratings are also frequently being downgraded due fair lending problems, and institutions have been ordered to cease offering a product or providing a service due to fair lending problems and complaints.
Changes in products and services, as well as evolving delivery methods, create new fairness risk points for financial institutions. Issues may arise from drop-mail ads and periodic statement messages. However, with the proliferation of e-mail, Web, and other electronic media messaging, it has become even more critical to carefully evaluate and monitor materials used to market products and services. New lending channels can also create headaches where loan applications may be only partially completed online/offline and then submitted. Each of these product/service channels must be evaluated for potential regulatory risk points.
Part 1 (August 19th 12-1:30 ET) is designed to help you assess what type of fair lending and service governance program currently exists in your institution and quickly identify potential high risk action points. Our speaker will provide detailed insights on potential risk areas, ideas for enhancements per recent examination recommendations, and guidance on monitoring and reporting fair lending activities.
During Part 2 (August 20th 12-1:30 ET), Mr. Miller will advise attendees on performing an initial high-level self-assessment as well insights on more in-depth drill-down reviews. He’ll discuss regulatory guidance, and outline a detailed, step-by-step process for conducting a fair lending review.
After attending Fair Lending: Program Development and Self-Assessment, you’ll be able to:
• Identify critical elements of a sound fair lending program
• Learn about data analysis and potential fair lending and services risks and management elements
• Understand why UDAAP (Regulation AA) violations have become more frequently cited
• Utilize a variety of analytical tools to assess data already available to the public and the regulators
• Evaluate your own institution’s performance and develop ways to better manage fair lending and service risk
• Develop an expanded awareness of self-testing risks, including critical steps for appropriate follow-up
• Assess the impact of open-item fair lending and services exceptions and the direct line to significant exam problems
• Prepare proactively for the next fair lending and compliance examination by your primary regulator
• Identify areas of CRA examinations impacted by fair lending performance and other management breakdowns
• Formulate a remedial focused action plan to address fair lending problems
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