Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal firm that insures deposits at federally guaranteed cooperative credit union, protects the members who own credit unions, and charters and manages federal cooperative credit union.
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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 implemented 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 modified. FHAct makes it unlawful for lending institutions to discriminate versus anybody in providing a property real estate-related deal or to dissuade a candidate from sending a loan application based on race, color, nationwide origin, faith, sex, familial status, or handicap.
In specific, FHAct uses to financing or acquiring a mortgage loan secured by domestic real estate. Specifically, a lender might not deny a loan or other for the purpose of purchasing, constructing, enhancing, fixing, or keeping a house on any of the forbidden bases noted above. FHAct also makes it unlawful for a lending institution to use a restricted basis to discriminate in setting the terms or conditions of credit, such as the loan quantity, rates of interest, or duration of the loan on a forbidden basis.
Furthermore, a loan provider may not express, orally or in composing, a preference based upon any restricted aspects or show that it will treat applicants in a different way on a forbidden basis, even if the loan provider did not act on that declaration. A violation might still exist even if a loan provider treated candidates similarly.
In addition, due to the fact that residential genuine estate-related transactions consist of any deals secured by residential property, FHAct's restrictions (and regulatory requirements in specific locations, such as advertising) apply to home equity credit lines along with to home purchase and refinancing loans. These restrictions likewise apply to the selling, brokering, or appraising of property genuine residential or commercial property and to secondary mortgage market activities. Consequently, a cooperative credit union's policies, procedures and practices involving housing financing need to be broadly examined to ensure that the credit union does not otherwise make unavailable or deny housing.
Sexual Preference and Gender Identity
Although FHAct does not specifically prohibit discrimination based on sexual preference or gender identity, HUD dealt with gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by issuing the Equal Access to Housing in HUD Programs No Matter Sexual Orientation or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule uses to housing helped or guaranteed by HUD, consequently affecting 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 subject to 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 shall be offered without regard to real or perceived sexual preference, gender identity, or marital status. (24 CFR § § 5.100 and 5.105( a)( 2 )). The Equal Access Rule became effective on March 5, 2012.
Fair Housing Act (FHAct, 42 U.S.C. § 3601) can be found here
HUD's Regulations (24 CFR Part 100) can be discovered here
For Equal Access to Housing in HUD Programs Regardless of Sexual Preference and Gender Identity (Equal Access Rule) can be discovered here
NCUA Rules and Regulations 12 CFR § 701.31 can be found here
Definitions utilized in:
- FHAct (42 U.S.C. § 3602) can be found here.
- HUD Regulations (24 CFR § 100.20) can be found here.
- Subpart A - Generally Applicable Definitions and Requirements; Waivers (24 CFR § 5.100) can be discovered 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 found here
Associated Risks.
Exam Objectives.
Exam Procedures.
Checklist
Associated Risks
Compliance risks can take place from unfavorable assessments or examinations, which might cause public or non-public enforcement actions with substantial fines and/or penalties. Evidence of a "pattern or practice" of discrimination might lead to a referral to the U.S. Department of Justice.
Reputational threat can take place when the cooperative credit union stops working to abide by the FHAct and individual or class action lawsuits are brought against the cooperative credit union it sustains fines and penalties through public enforcement actions or gets unfavorable promotion or declined membership self-confidence as a result of failure to abide by the FHAct.
Examination Objectives
- Determine whether the credit union has established policies, treatments, and internal controls to ensure that it remains in compliance with FHAct, its implementing regulation 24 CFR Part 100, and the appropriate NCUA regulation, 12 CFR § 701.31.
- Determine whether the credit union discriminated versus members of several safeguarded classes in any aspect of its domestic real estate-related transactions.
- Determine whether the credit union remains in compliance with those requirements of the FHAct set forth in HUD's carrying out regulation and the NCUA's pertinent regulation.
Exam Procedures
1. Determine whether the board has actually adopted policies, procedures, and general underwriting requirements worrying nondiscrimination in loaning and that officials review nondiscrimination policies, loan underwriting standards, and related organization practices frequently. In order to guarantee compliance with the FHAct, the policies, treatments, and standards must, at a minimum state that the credit union does not discriminate in residential real 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 statements that would prevent the receipt or factor to consider of any application for a loan or other credit service.
3. Conduct interviews of loan officers and other workers or agents in the property financing procedure worrying adherence to and understanding of the cooperative credit union's nondiscrimination policies and treatments as well as any pertinent operating practices.
4. Review any offered information concerning the geographical circulation of the credit union's loan originations with respect to the race and nationwide initial percentages of the census tracts within its residential real-estate lending location.
5. Review turned down mortgage loan applications to identify if the credit union has actually taken part in prohibited practices, including discrimination on the basis of: - The racial composition 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, and so on) for property real estate-related loans in certain geographic locations situated fairly within its functional area ( § 701.31( b)( 3 )). If the credit union has set more strict terms, carry out a review of loans made because geographical location to figure out whether the credit union's usage of more strict standards had a lawfully adequate validation.
7. Determine that the cooperative credit union has not set an approximate limit on loan size and the earnings required before granting a loan.
8. Determine from the loan evaluation whether the credit union makes a disproportionate variety of loans under one kind of funding (e.g., FHA, VA, other alternative mortgage instruments).
9. Determine the credit union is not using appraisals or the appraisal process to discriminate ( § 701.31( c)). Ensure the cooperative credit union avoids marking down appraised worths, e.g., lowering the evaluated value of a residential or commercial property due to its location or some unfavorable talk about the appraisal type.
10. Review authorized and turned down loan applications to make sure the credit union consistently used financial elements including but not restricted to: - Income and debt ratios;
- Credit report;
- Security residential or commercial property;
- Neighborhood features;
- Personal possessions.
11. Review the proper loan records to determine whether the cooperative credit union administers the following without predisposition ( § 701.31): - Loan modifications;
- Loan presumptions;
- Additional collateral requirements;
- Late charges;
- Reinstatement charges;
- Collections.
- Visually figure out whether the cooperative credit union has an Equal Housing Lender Poster notably placed in all of the cooperative credit union's workplaces which all nondiscrimination notifications abide by the requirements of § 701.31(d).