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This is the first post in our "Understanding Fair Lending" series based on a recent fair lending webinar with Jerry Miller. 9 more articles will come over the next week. You can download the full webinar here.
Not long ago we held a free Fair Lending compliance Webinar with industry veteran Jerry Miller, and more than 250 financial services professionals attended. It was a phenomenal event, structured with a 30-minutes presentation from Jerry with an additional 30 minutes set aside solely for Q&A from the audience.
Given the number of questions after Jerry’s presentation, we might just need to schedule a bit more time for questions next time.
One of the most popular topics raised during Q&A focused on the implications of fair lending as applied to commercial lending. Watch the video we made from this question (it’s less than 2-minutes long), or read the full transcript below. Some of the highlights include:
Of course, this is just a small piece of the 60-min session that took place on 6/4/14. Here are a few more options to supplement your fair lending training:
What do you think? Are there additional fair-lending questions you’d like addressed? Include them in the comments section below or email us at firstname.lastname@example.org. You can also find more Sheshunoff™ training and materials at the LexisNexis® Store.
MODERATOR: The participant is wondering, Jerry, if you could speak about fair lending and Regulation B requirements for commercial lending. Are the requirements as strict, and what are some of the common pitfalls?
Mr. MILLER: That's an excellent question because as a former OCC examiner/person who worked in the district office/Washington, I used to kid people who were safety examiners who said, "I don't need to know about that consumer stuff because it doesn't apply to commercial lending." Most certainly, it does. And one of the common pitfalls that I see happening is requiring joint signatures on documents for a commercial small business loan when it's not required.
I also would remind people that the adverse action notice requirements under Reg B apply to commercial loans. And frankly, in the state that I happen to be located in, the state of Illinois, one of the larger settlement cases that has occurred, occurred when an institution forgot to notify and then follow up with a written notice to a commercial customer that they had turned down their request for a line of credit. Ultimately, it led to the customer's bankruptcy in a federal court. The customer proved without a doubt that they had not been notified and had not received a written notice and a decision had been made to turn them down. And while they were waiting, it got closer to the time of season when their primary business was going to accelerate, and because of that the company failed. The court rewarded significant financial dollars to the company that failed which the bank, in the case, unfortunately, had to pay out.