The battle over Consumer Reinvestment Act (CRA) modernization is heating up as the Federal Reserve shared its plans for CRA reform and the House Financial Services Committee held a hearing assessing the potential winners and losers the OCC/FDIC CRA modernization proposal. Spoiler alert: The OCC/FDIC plan was subject to a lot of criticism.
Any time a regulator shares its observations of where violations are occurring and what you can do to prevent them, it’s worth taking note. This includes the Fed’s December 2019 Consumer Compliance Supervision Bulletin. The publication’s goal is to increase transparency into what the Fed is seeing in the consumer compliance arena and offer practical advice for reducing risk—and this month fair lending risk related to internet-based marketing takes a front seat.
The requirements of a compliance management system (CMS) seem relatively simple. The primary functional regulators agree that there are three crucial elements of a good CMS: Board and management oversight of change management, risk management and corrective actions A formal compliance program with policies, procedures, training, monitoring and complaint responses An audit function
Why do Home Mortgage Disclosure Act (HMDA) Loan Application Register (LAR) violations happen? Weaknesses in compliance management systems (CMSs), according to Matthew Nixon, program officer in the National Credit Union Administration’s (NCUA) Office of Consumer Financial Protection.
Your institution might be using compliance analytics software and services for Fair Lending, HMDA, CRA, or Redlining so that it can recognize risks, increase transparency and grow smartly. But are you making the most of that data from a risk management perspective? Not if that data is only used by the lending, credit, or compliance departments. While compliance and lending are the most closely linked to Fair Lending risk, the truth is that Fair Lending extends into many operational areas. From marketing to the location of new branches to M&A, Fair Lending risk has a role to play in decision making.
According to FDIC Chairman Jelena McWilliams, there is a chance that the agencies will end up not reaching an agreement on CRA modernization. We catch you up on what she means and what could end up happening.