Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that guarantees deposits at federally guaranteed credit unions, 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 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 discriminate versus anybody in making available a property real estate-related transaction or to dissuade an applicant from submitting a loan application based on race, color, nationwide origin, religion, sex, familial status, or handicap.
In specific, FHAct applies to funding or acquiring a mortgage loan secured by domestic genuine estate. Specifically, a lender might not reject a loan or other financial assistance for the purpose of acquiring, building, enhancing, fixing, or keeping a residence on any of the restricted bases kept in mind above. FHAct also makes it illegal for a loan provider to use a restricted basis to discriminate in setting the terms or conditions of credit, such as the loan quantity, rate of interest, or duration of the loan on a forbidden basis.
Furthermore, a lending institution might not reveal, orally or in writing, a preference based upon any prohibited factors or indicate that it will treat applicants in a different way on a forbidden basis, even if the lender did not act on that declaration. An infraction might still exist even if a loan provider treated applicants similarly.
In addition, since residential genuine estate-related transactions consist of any transactions protected by domestic property, FHAct's prohibitions (and regulative requirements in specific locations, such as advertising) use to home equity credit lines in addition to to home purchase and refinancing loans. These prohibitions also use to the selling, brokering, or appraising of residential genuine residential or commercial property and to secondary mortgage market activities. Consequently, a cooperative credit union's policies, procedures and practices involving housing financing should be broadly examined to ensure that the cooperative credit union does not otherwise make unavailable or reject housing.
Sexual Orientation and Gender Identity
Although FHAct does not specifically restrict discrimination based upon sexual preference or gender identity, HUD addressed gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by releasing the Equal Access to Housing in HUD Programs Despite Sexual Preference or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule applies to housing assisted or insured by HUD, consequently affecting Federal Housing Administration-approved lending institutions and others taking part in HUD programs. Specifically, a determination of eligibility for housing that is assisted by HUD or subject to a mortgage guaranteed by the Federal Housing Administration shall be made in accordance with the eligibility requirements attended to such program by HUD, and such housing shall be offered without regard to actual or viewed sexual orientation, 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 discovered here
HUD's Regulations (24 CFR Part 100) can be found here
For Equal Access to Housing in HUD Programs Regardless of Sexual Preference and Gender Identity (Equal Access Rule) can be found here
NCUA Rules and Regulations 12 CFR § 701.31 can be discovered here
Definitions used in:
- FHAct (42 U.S.C. § 3602) can be discovered 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 discovered here
Associated Risks.
Exam Objectives.
Exam Procedures.
Checklist
Associated Risks
Compliance threats can happen from unfavorable evaluations or investigations, which might cause public or non-public enforcement actions with significant fines and/or penalties. Evidence of a "pattern or practice" of discrimination might result in a referral to the U.S. Department of Justice.
Reputational danger can occur when the credit union stops working to abide by the FHAct and individual or class action claims are brought versus the credit union it sustains fines and charges through public enforcement actions or receives negative promotion or decreased subscription confidence as an outcome of failure to abide by the FHAct.
Examination Objectives
- Determine whether the credit union has developed policies, procedures, and internal controls to guarantee that it remains in compliance with FHAct, its implementing regulation 24 CFR Part 100, and the pertinent NCUA regulation, 12 CFR § 701.31.
- Determine whether the credit union victimized members of one or more protected classes in any aspect of its domestic genuine estate-related transactions.
- Determine whether the credit union is in compliance with those requirements of the FHAct set forth in HUD's implementing regulation and the NCUA's appropriate regulation.
Exam Procedures
1. Determine whether the board has adopted policies, treatments, and basic underwriting standards worrying nondiscrimination in lending and that officials evaluate nondiscrimination policies, loan underwriting requirements, and associated organization practices frequently. In order to assure compliance with the FHAct, the policies, procedures, and requirements must, at a minimum state that the credit union does not discriminate in residential real estate-related transactions 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 forbid the staff members from making declarations 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 staff members or agents in the property financing process worrying adherence to and understanding of the cooperative credit union's nondiscrimination policies and procedures in addition to any relevant operating practices.
4. Review any offered data concerning the geographical distribution of the cooperative credit union's loan originations with respect to the race and national original portions of the census systems within its domestic real-estate lending area.
5. Review turned down mortgage loan applications to determine if the cooperative credit union has participated in forbidden practices, including discrimination on the basis of: - The racial composition of an area;
- The earnings level of a location; or
- The language of an applicant( s).
6. Review the cooperative credit union's practices, records, and reports to figure out if it sets more strict terms (e.g. down payments, interest rates, terms, fees, loan amounts, etc) for residential real estate-related loans in specific geographic locations located fairly within its functional location ( § 701.31( b)( 3 )). If the cooperative credit union has actually set more rigid terms, carry out an evaluation of loans made because geographical location to identify whether the credit union's use of more stringent standards had a lawfully sufficient reason.
7. Determine that the cooperative credit union has not set an arbitrary limitation on loan size and the earnings required before granting a loan.
8. Determine from the loan review whether the cooperative credit union makes a disproportionate number of loans under one kind of funding (e.g., FHA, VA, other alternative mortgage instruments).
9. Determine the cooperative credit union is not using appraisals or the appraisal procedure to discriminate ( § 701.31( c)). Ensure the credit union refrains from discounting evaluated values, e.g., lowering the appraised value of a residential or commercial property due to its place or some unfavorable remark on the appraisal type.
10. Review authorized and declined loan applications to guarantee the cooperative credit union uniformly applied financial factors consisting of however not restricted to: - Income and financial obligation ratios;
- Credit report;
- Security residential or commercial property;
- Neighborhood amenities;
- Personal properties.
11. Review the suitable loan records to figure out whether the cooperative credit union administers the following without bias ( § 701.31): - Loan modifications;
- Loan assumptions;
- Additional security requirements;
- Late charges;
- Reinstatement costs;
- Collections.
- Visually identify whether the cooperative credit union has an Equal Housing Lender Poster notably put in all of the cooperative credit union's offices and that all nondiscrimination notices comply with the requirements of § 701.31(d).
