The Smart Compliance Blog

3 Fair Lending Settlements Provide 5 Industry Reminders

December 31, 2013

The regulators continue to focus on fair lending as evidenced by 3 unique year-end settlements (all three taking place in the second half of December). Below are highlights from these settlements along with the 5 key industry messages that the regulators are telegraphing to lenders.  Is your financial institution's compliance program prepared comply with the telegraphed guidance?   

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Topics: bank analytics, DOJ, Consumer Financial Protection Bureau, Fair Lending Comparative Analysis, fair lending settlement, fair lending fines, consumer Fair Lending surrogates, ECOA, Fair Lending Enforcement, Bank Compliance, Fair Lending Risk Assessment, Auto Dealer Fair Lending, fair lending risk review, indirect auto lending fair lending risk, Auto Finance Fair Lending, Indirect Auto Lending

Are You on the Regulator Fair Lending Radar? 5 Factors to Assess

November 12, 2013

The CFPB released its fourth Semi-Annual Report on November 5th.  The report provides Congress and the public an update on the Bureau’s mission, activities, accomplishments and publications.  Below is a quick snapshot of the CFPB’s Fair Lending prioritization process that enables the Bureau to determine which entities and product types pose the greatest risk of lending discrimination to consumers and where to dedicate resources accordingly.  Are you weak in any of the “Big 5 Factors” used to determine regulator focus and exam priorities?  Answer a few quick questions to determine if you are popping up on your regulator's radar.


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Topics: Fair Lending Analysis, Consumer Financial Protection Bureau, Fair Lending Comparative Analysis, Fair Lending Risk Assessment, fair lending risk review, fair lending exam, Compliance Management Systems, Complaints, Compliance Exam

3 Fair Lending Exams Defined - Which is Your Flavor?

July 30, 2013

The Consumer Financial Protection Bureau quietly published its Baseline Review modules for examination of compliance with the Equal Credit Opportunity Act (ECOA).  The new Baseline Reviews will be used in conjunction with fair lending statistical analysis to obtain a full picture of fair lending compliance and fair lending risks at the entity.    The CFPB has now defined three unique types of fair lending reviews used to analyze fair lending compliance and fair lending risks.  Which flavor of exam will your organization receive?

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Topics: HMDA, fair lending assessment, Fair Lending Analysis, Consumer Financial Protection Bureau, ECOA, Fair Lending Risk Assessment, fair lending exam

CFPB Declares Data-Centric Future with New Strategy. Are You Ready?

April 18, 2013

The Consumer Financial Protection Bureau continues to provide a transparent view into their priorities by updating and sharing their strategic plan. After reading the strategic plan for fiscal years 2013-2017, it is clear that it is moving towards a data-centric future.  Is your compliance management program ready to embrace this new world?

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Topics: HMDA, Fair Lending Analysis, CFPB, Home Mortgage Disclosure Act, Consumer Financial Protection Bureau, Fair Lending Comparative Analysis, HMDA Plus

CFPB Provides Warning on Indirect Lending - You Have Been Deputized!

March 26, 2013

It has been estimated that there were 15.7 million consumer auto loans originations in 2012.  Auto loans are the third largest source of outstanding household debt (after mortgages and student loans) with over $783 billion in outstanding loans in 2012.  It was simply a matter of time before the CFPB would focus on this huge market.  Accordingly, on March 21st, the Consumer Financial Protection Bureau (CFPB) issued guidance on fair lending practices to indirect auto lenders (e.g. Banks and Credit Unions).  The CFPB’s bulletin explains that certain lenders that offer auto loans through dealerships are responsible for unlawful, discriminatory pricing.  The CFPB’s bulletin provides guidance to indirect auto lenders on how to address fair lending risk.

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Topics: Loan Officer Discretion, regulatory compliance, Consumer Financial Protection Bureau, Auto Dealer Fair Lending, indirect auto lending fair lending risk, Equal Credit Opportunity Act, Disparate Impact, Fair Housing Act, Third-Party Fair Lending Risks

10 Questions for Third-Party Compliance

March 19, 2013

The board of directors and senior management are responsible for managing activities conducted through third-party relationships, and identifying and controlling the risks arising from such relationships, to the same extent as if the activity were handled within the institution. Financial Institutions are expected to have clearly defined systems of risk management controls built into the management system including controls over activities conducted by affiliates and third-parties. The more significant the third-party service relationship (i.e. performs critical functions, material impact on revenues, large number of consumers, etc.), the more important it is that the institution conduct regular reviews of the adequacy of its oversight and controls over third-party relationships. Examiners will evaluate all applicable third-party relationships as though the activities were performed by the institution itself.

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Topics: regulatory compliance, risk based assessment, Fair Lending Analysis, CFPB, Consumer Financial Protection Bureau, Fair Lending Comparative Analysis, consumer Fair Lending surrogates, Auto Dealer Fair Lending, Third-Party Fair Lending Risks

4 Classes of Problems - CFPB Focuses on Discrimination & Fair Lending

March 05, 2013

The Consumer Advisory Board to the Consumer Financial Protection Bureau is responsible for identifying the “impact of emerging products, practices or services on consumers and other market participants.”  At the February board meeting, Richard Cordray, Director of the CFPB, presented the Bureau’s areas of focus for the future. 


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Topics: Fair Lending Analysis, Consumer Financial Protection Bureau, ECOA, Bank Compliance, Disparate Impact, UDAAP

7 New Rules from the CFPB - Are You Ready? (3 of 3)

January 30, 2013

This is the third and final post in this series addressing the new CFPB mortgage loan rules.
As we all know by now, since 1/1/2013 there have been seven (7) new rule additions or changes that compliance officers and bank leadership must be aware of.

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Topics: CFPB, Consumer Financial Protection Bureau, Mortgage Compensation Rule, Reg B Appraisal Rule

7 New Rules from the CFPB - Are You Ready? (2 of 3)

January 29, 2013

In our last post, “7 New Rules from the CFPB – Are You Ready?”, we provided a summary and break-down of the most recent onslaught of changes and new rules that have been pushed out to the financial community. Bank leadership and compliance professionals are struggling to stay abreast of and implement these changes. That post covered the first three rules. This post will summarize rule four and five.  


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Topics: Higher-Priced Mortgage Loans, HPMLs, fair lending, CFPB, Consumer Financial Protection Bureau, FDIC, Federal Reserve, OCC, Mortgage Servicing Rule, NCUA

7 New Rules from the CFPB - Are You Ready? (1 of 3)

January 28, 2013

As we celebrate the start of 2013, financial institutions and their compliance departments have been crushed under a deluge of new regulations and amendments, and it’s still January.

The CFPB has been busy the past couple weeks issuing, socializing, presenting and discussing the new mortgage rules. At last count, there have been over 2,600 pages of new rules released in January alone.

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Topics: High-Cost Mortgage, Truth in Lending Act, CFPB, Consumer Financial Protection Bureau, Ability-to-Pay Rule

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