Compliance officers who haven’t yet committed to a comprehensive fair-lending compliance program may want to consider the issue from the perspective of Assistant Attorney General Thomas Perez. In testimony before the Senate Judiciary Committee on March 7th, he explained the additional need for fair-lending oversight in the wake of the housing crisis.
The federal government, with the complete support of the Obama administration, has made fair lending a top priority. Attorney General Eric Holder created the Fair Lending Unit in the Civil Rights Division’s Housing and Civil Enforcement Section in 2009.
In the last two years, this department has been busy. They have brought 16 actions and settled 16 cases. In 2011 alone, eight of those cases resulted in more than $350 million in fines. This compares to an average of about two cases a year between 1993 and 2008.
Perez’s testimony serves as further proof of this administration’s belief that lending discrimination is prevalent in banking. It also provides clear guidance for those of us who manage fair lending programs.
“The best policing is the policing that comes from within,” he said during his testimony, repeating what has been a common refrain for him and the Department of Justice.
We here at TRUPOINT Partners agree with that statement. Our experience helping community banks and other lenders indicates that many of the discriminatory practices that lenders are being cited for are preventable and could be avoided if the lenders understood their numbers and put in the proper controls, including: annual risk assessments; analyzing your lending data; and reviewing your policies for issues that might run counter to fair-lending practices. Contact TRUPOINT Partners today to learn how to address fair lending more easily than you might have imagined.