The Smart Compliance Blog

A survey published April 25^th by BAI Banking Strategies reveals that community bankers are struggling with the increasing compliance costs even before the Dodd-Frank Act has kicked in full-force.  Between 2009 and 2011, banks with assets of $470 million (the median for respondents) saw compliance costs rise nearly 19 percent a year, from $131,000 to $185,000, the survey showed.  And 70 percent of the responding banks predict their compliance costs will increase $50,000 annually, BAI reported.

With fair lending now a critical part of every compliance exam, more lenders are making the wise decision to review their loan data every year. Those who really want to stay on top of their data should follow the examiners’ lead and work “surrogates” into their review of non-HMDA files.

Blog by Andy Barksdale Managing Director
 
The Consumer Financial Protection Bureau issued a press release Wednesday that every financial compliance officer in the country should read. In it, the CFPB threatened to use “all available legal avenues, including disparate impact, to pursue lenders whose practices discriminate against consumers.”  (Disparate impact occurs when a lender’s practices or policies appear to be neutral, but have discriminatory effects.)

The lawsuit filed last week against GFI Mortgage Bankers is a sobering reminder that fair-lending scrutiny isn’t restricted to banks.