Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that guarantees deposits at federally guaranteed cooperative credit union, protects the members who own credit unions, and charters and controls federal credit unions.
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4. > Federal Consumer Financial Protection Guide
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Fair Housing Act (FHA)
Federal Consumer Financial Protection Guide
Compliance ManagementCompliance Management Systems and Compliance Risk
Consumer Leasing Act (Regulation M).
Fair Credit Reporting Act (Regulation V).
Homeowners Protection Act (PMI Cancellation Act).
Military Lending Act (MLA).
Real Estate Settlement Procedures Act (Regulation X).
Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) (Regulation G).
Servicemembers Civil Relief Act (SCRA).
Small Dollar Lending and Payday Alternative Loans.
Truth in Lending Act (Regulation Z).
Equal Credit Opportunity Act (Regulation B).
Fair Housing Act (FHA).
Home Mortgage Disclosure Act (Regulation C).
Electronic Fund Transfer Act (Regulation E).
Expedited Funds Availability Act (Regulation CC).
Truth in Savings Act (NCUA Rules & Regulations Part 707).
Children's Online Privacy Protection Act.
Privacy of Consumer Financial Information (Regulation P).
Unfair, Deceptive, or Abusive Acts or Practices (UDAAP).
Electronic Signatures in Global and National Commerce Act (E-Sign Act).
Fair Housing Act (FHAct, 42 U.S.C. § 3601 et seq.), which is carried out by the Department of Housing and Urban Development's (HUD) guidelines (24 CFR Part 100), was enacted as Sections 800 to 820 of Title VIII of the Civil Rights Act of 1968, as changed. FHAct makes it illegal for lenders to victimize anyone in making readily available a residential real estate-related deal or to discourage an applicant from submitting a loan application based on race, color, nationwide origin, religious beliefs, sex, familial status, or handicap.
In particular, FHAct applies to funding or purchasing a mortgage loan protected by domestic realty. Specifically, a lending institution might not reject a loan or other monetary support for the purpose of purchasing, building, enhancing, repairing, or maintaining a residence on any of the restricted bases noted above. FHAct also makes it illegal for a lending institution to utilize a restricted basis to discriminate in setting the terms or conditions of credit, such as the loan quantity, rate of interest, or period of the loan on a forbidden basis.
Furthermore, a lender may not express, orally or in writing, a choice based upon any forbidden elements or indicate that it will deal with candidates differently on a restricted basis, even if the lending institution did not act upon that declaration. A violation may still exist even if a lending institution treated candidates similarly.
In addition, because residential real estate-related deals consist of any deals protected by property genuine estate, FHAct's prohibitions (and regulatory requirements in certain areas, such as marketing) apply to home equity lines of credit along with to home purchase and refinancing loans. These prohibitions likewise apply to the selling, brokering, or appraising of property real residential or commercial property and to secondary mortgage market activities. Consequently, a cooperative credit union's policies, treatments and practices including housing financing should be broadly examined to guarantee that the cooperative credit union does not otherwise make not available or deny housing.
Sexual Preference and Gender Identity
Although FHAct does not expressly forbid discrimination based on sexual preference or gender identity, HUD addressed gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by issuing the Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule applies to housing assisted or guaranteed by HUD, therefore impacting Federal Housing Administration-approved loan providers and others taking part in HUD programs. Specifically, a determination of eligibility for housing that is assisted by HUD or based on a mortgage insured by the Federal Housing Administration shall be made in accordance with the eligibility requirements offered such program by HUD, and such housing will be offered without regard to real or perceived sexual orientation, gender identity, or marital status. (24 CFR § § 5.100 and 5.105( a)( 2 )). The Equal Access Rule ended up being reliable on March 5, 2012.
Fair Housing Act (FHAct, 42 U.S.C. § 3601) can be discovered here
HUD's Regulations (24 CFR Part 100) can be found here
For Equal Access to Housing in HUD Programs Regardless of Sexual Orientation and Gender Identity (Equal Access Rule) can be found here
NCUA Rules and Regulations 12 CFR § 701.31 can be found here
Definitions used in:
- FHAct (42 U.S.C. § 3602) can be found here.
- HUD Regulations (24 CFR § 100.20) can be discovered here.
- Subpart A - Generally Applicable Definitions and Requirements; Waivers (24 CFR § 5.100) can be found here.
- Subpart G - Discriminatory Effect of HUD Regulations (24 CFR § 100.500) can be found here.
- NCUA Rules and Regulations (12 CFR § 701.31( a)) can be discovered here
Associated Risks.
Exam Objectives.
Exam Procedures.
Checklist
Associated Risks
Compliance threats can happen from unfavorable evaluations or examinations, which might result in public or non-public enforcement actions with considerable fines and/or penalties. Evidence of a "pattern or practice" of discrimination may lead to a referral to the U.S. Department of Justice.
Reputational risk can happen when the cooperative credit union fails to abide by the FHAct and specific or class action claims are brought against the credit union it incurs fines and penalties through public enforcement actions or receives negative publicity or decreased subscription confidence as a result of failure to adhere to the FHAct.
Examination Objectives
- Determine whether the credit union has actually developed policies, treatments, and internal controls to ensure that it is in compliance with FHAct, its carrying out guideline 24 CFR Part 100, and the relevant NCUA regulation, 12 CFR § 701.31.
- Determine whether the credit union discriminated against members of several protected classes in any aspect of its domestic real estate-related deals.
- Determine whether the cooperative credit union remains in compliance with those requirements of the FHAct set forth in HUD's carrying out policy and the NCUA's appropriate policy.
Exam Procedures
1. Determine whether the board has actually adopted policies, procedures, and basic underwriting requirements concerning nondiscrimination in lending and that officials evaluate nondiscrimination policies, loan underwriting standards, and related business practices frequently. In order to guarantee compliance with the FHAct, the policies, treatments, and standards must, at a minimum state that the cooperative credit union does not discriminate in domestic genuine estate-related deals based upon (12 CFR § 701.31( b), 24 CFR § 100.50( b), 24 CFR § 5.100): - Race;.
- Color;.
- National origin;.
- Religion;.
- Sex;.
- Familial status; and,.
- Handicap.
2. Determine that the cooperative credit union has policies that prohibit the employees from making declarations that would discourage the invoice or consideration of any application for a loan or other credit service.
3. Conduct interviews of loan officers and other employees or representatives in the property loaning procedure worrying adherence to and understanding of the cooperative credit union's nondiscrimination policies and procedures in addition to any appropriate operating practices.
4. Review any readily available information relating to the geographical circulation of the cooperative credit union's loan originations with regard to the race and nationwide initial portions of the census tracts within its domestic real-estate loaning area.
5. Review turned down mortgage loan applications to identify if the cooperative credit union has taken part in forbidden practices, consisting of discrimination on the basis of: - The racial structure of an area;
- The earnings level of an area; or
- The language of an applicant( s).
6. Review the cooperative credit union's practices, records, and reports to determine if it sets more stringent terms (e.g. deposits, interest rates, terms, costs, loan amounts, etc) for property real estate-related loans in certain geographic areas located fairly within its functional area ( § 701.31( b)( 3 )). If the credit union has actually set more rigid terms, conduct an evaluation of loans made in that geographic location to determine whether the credit union's use of more stringent standards had a lawfully enough reason.
7. Determine that the cooperative credit union has not set an arbitrary limit on loan size and the earnings needed before approving a loan.
8. Determine from the loan review whether the credit union makes an out of proportion number of loans under one type of funding (e.g., FHA, VA, other alternative mortgage instruments).
9. Determine the cooperative credit union is not utilizing appraisals or the appraisal procedure to discriminate ( § 701.31( c)). Ensure the credit union avoids marking down evaluated worths, e.g., decreasing the appraised value of a residential or commercial property due to its location or some negative discuss the appraisal type.
10. Review approved and declined loan applications to make sure the cooperative credit union evenly applied economic aspects consisting of however not restricted to: - Income and debt ratios;
- Credit rating;
- Security residential or commercial property;
- Neighborhood facilities;
- Personal properties.
11. Review the appropriate loan records to identify whether the credit union administers the following without bias ( § 701.31): - Loan adjustments;
- Loan assumptions;
- Additional security requirements;
- Late charges;
- Reinstatement charges;
- Collections.
- Visually determine whether the credit union has an Equal Housing Lender Poster notably positioned in all of the credit union's offices and that all nondiscrimination notifications comply with the requirements of § 701.31(d).
