Is fair lending an important issue? Here are snippets from the CFPB’s Acting Director David Uejio Fair Lending Report opening comments, “…my top priorities for this agency are to take bold and swift action to address issues of pervasive racial injustice and the long-term economic impacts of the COVID-19 pandemic on consumers…the economic impacts of COVID-19 are just starting to be understood, it is clear that the pandemic is exacerbating racial inequality in all markets, including rising housing insecurity among the most vulnerable consumers.” And he went on to say, “ the lingering impacts of over 400 years of chattel slavery and Jim Crow laws that sought to limit racial equality through institutionalized discrimination, deepens our nation’s longstanding racial inequities.” I would say there is an agenda there. Will this culture permeate through the prudential banking agencies? The pendulum is swinging back to ultra-conservative regulatory requirements and now is the time to prepare your bank.

HMDA data continues to incite allegations of discrimination, recent reports of lending on manufactured homes is doing the same, banks may not be reacting well to the gender-identity guidance and there are a lot of loans ready to exit forbearance that must have appropriate actions taken. 

Fair lending isn’t anyone’s job, it’s everyone’s obligation and many bankers, including lenders and compliance officers, take it for granted. We must be proactive and transparent so there is no sign of impropriety or that it is a trivial matter. This is considered staying ahead of the power curve.

Fair lending hasn’t had a single big event propelling it to the front burner, but it deserves your attention. The CFPB’s Acting Director David Uejio Fair Lending Report opening, comments include, “…my top priorities for this agency are to take bold and swift action to address issues of pervasive racial injustice and the long-term economic impacts of the COVID-19 pandemic on consumers…the economic impacts of COVID-19 are just starting to be understood, it is clear that the pandemic is exacerbating racial inequality in all markets, including rising housing insecurity among the most vulnerable consumers.” And he went on to say, “ the lingering impacts of over 400 years of chattel slavery and Jim Crow laws that sought to limit racial equality through institutionalized discrimination, deepens our nation’s longstanding racial inequities.”

• The CFPB has offered guidance on gender neutrality, what was your bank’s reaction?
• HMDA data shows signs of lending discrimination, what was your bank’s self-analysis?
• Manufactured housing seems to have higher interest and denial rates, where does your bank stand?
  
  

Fair lending issues are beginning to grow and are hitting the press. There has been HMDA LAR data problems, podcasts leading to charges of redlining and banking policies resulting in redlining and reverse redlining of minority neighborhoods. There are many touchpoints between compliance and fair lending, and it’s more than consumer protections which are extremely important to the current administration.

We’ll talk about all these issues and more in this fast paced two-hour fair lending update. I hope you’ll be able to join me.