What does fair lending requirements apply to?

Who does fair lending laws apply to?

It applies to any extension of credit, including residential real estate lending and extensions of credit to small businesses, corpora tions, partnerships, and trusts. Lending acts and practices that are specifically prohibited, permitted, or required are described in the regulation.

What are the 3 main fair lending regulations?

The courts have recognized three methods of proof of lending discrimination under the ECOA and the FHAct: Overt evidence of disparate treatment; • Comparative evidence of disparate treatment; and • Evidence of disparate impact.

Who does ECOA apply?

The Equal Credit Opportunity Act (ECOA), which is implemented by Regulation B, applies to all creditors. When originally enacted, ECOA gave the Federal Reserve Board responsibility for prescribing the implementing regulation.

What is prohibited by fair lending laws?

Prohibited bases: race, color, religion, national origin, sex, marital status, age (provided the applicant has capacity to contract), receipt of public assistance, or exercise of rights under the Consumer Credit Protection Act.

What regulations support fair lending practices?

Two different federal laws deal with discrimination in lending: the Fair Housing Act (FHAct) and the Equal Credit Opportunity Act (ECOA). These fair lending laws prohibit lenders from discriminating in credit transactions on the basis of race, color, national origin, religion, sex, and other specified grounds.

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What are potential consequences of violating fair lending requirements?

Failure to comply with the Fair Lending requirements may: Failure to comply with the Fair Lending requirements may result in fines and penalties, harm the bank’s reputation, and be a violation of the Code of Conduct, which could result in corrective action, up to and including termination of your employment.

Does fair lending requirements apply to prepaid cards?

In addition, insofar as the CFPB treats certain overdraft features as an extension of credit, this may, for the first time, subject prepaid accounts with overdraft features to federal fair lending rules under the Equal Credit Opportunity Act and Regulation B. …

Do fair lending laws apply to commercial loans?

Opportunity Act (ECOA) and the Interagency Fair Lending Examination Procedures remind us, “A creditor shall not discriminate against an applicant regarding any aspect of a credit transaction”; this includes small business and commercial lending.

What is a fair lending program?

The Fair Housing Act, 42 USC 3601 et seq., prohibits discrimination in home mortgage loans, home improvement loans, and other residential credit transactions, on the basis of race, color, religion, national origin, sex, familial status or disability.

What are ECOA requirements?

The Equal Credit Opportunity Act (ECOA), enacted in 1974, and its implementing rules (known as Regulation B) prohibit creditors from discriminating on the basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to contract), because all or part of an …

Who enforces TILA requirements?

The Federal Trade Commission is authorized to enforce Regulation Z and TILA. Federal law also gives the Office of the Comptroller of the Currency the authority to order lenders to adjust and edit the accounts of consumers whose finance charges or annual percentage rate (APR) was inaccurately disclosed.

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Under what circumstances can a lender require a spousal signature on a loan application?

If the applicant is relying on the spouse’s income (including future earnings), the creditor may require the spouse’s signature to make the income available to pay the debt.