The law has long permitted the use of disparate impact analysis to prove discrimination, which means that your credit union can be found liable for discrimination even if there was no intent to discriminate. Credit unions have recently reported that regulators are using statistical analysis and unpublished analytical formulas during fair lending exams, with a new focus on unsecured and vehicle loans, in addition to home loans. The problem is that using these new methodologies and analytical formulas has resulted in “false positive” findings of discrimination.
The NCUA Fair Lending Guide provides:
Congress intended an ‘effects test’ concept to apply to a credit union’s determination of creditworthiness. The effects test refers to a credit practice that appears facially neutral, but has a disproportionately negative effect on a prohibited basis, even though the credit union has no intent to discriminate. This type of practice is discriminatory, in effect, unless the credit union can demonstrate the practice meets a legitimate business need that cannot be reasonably achieved by means less disparate in impact.
The new concern is that regulators can establish disparate impact (i.e., discrimination) based solely on statistics and unpublished analytical formulas. This webinar will help you prepare for your next fair lending exam and include suggestions on how to defend against disparate impact and discrimination claims.
- Overview of the fair lending laws and your institution’s obligations
- Risks of noncompliance
- Difference between discrimination and disparate impact
- Restrictions on obtaining a spouse’s signature on loan documents and situations when a spouse’s signature is permitted
- Defending against red-lining claims
- TAKE-AWAY TOOLKIT
- Interagency Fair Lending Examination Procedures
- Fair Lending Report of the Bureau of Consumer Financial Protection (December 2018)
- NCUA Fair Lending Guide (July 2017)
- Employee training log
- NEW: Interactive Quiz to measure staff learning
WHO SHOULD ATTEND?
This informative session is designed for all lending personnel, including loan officers, loan operations personnel, credit analysts, compliance officers, auditors, attorneys, and managers.
SPEAKER: Elizabeth Fast, Spencer Fane LLP
Elizabeth Fast is a partner with Spencer Fane Britt & Browne LLP where she specializes in the representation of financial institutions. Elizabeth is the head of the firm’s training division. She received her law degree from the University of Kansas and her undergraduate degree from Pittsburg State University. In addition, she has a Master of Business Administration degree and she is a Certified Public Accountant. Before joining Spencer Fane, she was General Counsel, Senior Vice President, and Corporate Secretary of a $9 billion bank with more than 130 branches, where she managed all legal, regulatory, and compliance functions. She is a member of the Missouri State Banking Board by appointment of the Governor.