Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal company that insures deposits at federally insured cooperative credit union, safeguards the members who own credit unions, and charters and controls federal cooperative credit union.
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4. > Federal Consumer Financial Protection Guide
5. > Compliance Management
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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) regulations (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 loan providers to victimize anybody in making available a domestic real estate-related transaction or to discourage an applicant from submitting a loan application based on race, color, national origin, religious beliefs, sex, familial status, or handicap.
In specific, FHAct applies to financing or acquiring a mortgage loan protected by domestic property. Specifically, a lender might not reject a loan or other financial help for the purpose of acquiring, constructing, enhancing, repairing, or preserving a residence on any of the forbidden bases noted above. FHAct also makes it illegal for a lender to utilize a prohibited basis to discriminate in setting the terms or conditions of credit, such as the loan amount, rates of interest, or duration of the loan on a prohibited basis.
Furthermore, a loan provider might not express, orally or in writing, a choice based on any prohibited aspects or suggest that it will treat candidates differently on a restricted basis, even if the lender did not act upon that declaration. An infraction might still exist even if a loan provider dealt with applicants similarly.
In addition, since residential genuine estate-related transactions include any transactions protected by residential property, FHAct's prohibitions (and regulatory requirements in certain locations, such as advertising) use to home equity lines of credit along with to home purchase and refinancing loans. These restrictions also apply to the selling, brokering, or appraising of domestic genuine residential or commercial property and to secondary mortgage market activities. Consequently, a cooperative credit union's policies, procedures and practices involving housing financing must be broadly analyzed to guarantee 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 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 Regardless of Sexual Preference or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule applies to housing helped or guaranteed by HUD, consequently impacting Federal Housing Administration-approved lending institutions and others participating in HUD programs. Specifically, a decision of eligibility for housing that is helped 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 actual 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 found here
For Equal Access to Housing in HUD Programs Despite Sexual Orientation 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 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 found here.
- Subpart G - Discriminatory Effect of HUD Regulations (24 CFR § 100.500) can be discovered 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 take place from unfavorable assessments 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 recommendation to the U.S. Department of Justice.
Reputational risk can happen when the credit union fails to comply with the FHAct and individual or class action suits are brought against the cooperative credit union it sustains fines and charges through public enforcement actions or receives negative promotion or declined membership self-confidence as an outcome of failure to abide by the FHAct.
Examination Objectives
- Determine whether the cooperative credit union has established policies, treatments, and internal controls to guarantee that it remains in compliance with FHAct, its carrying out policy 24 CFR Part 100, and the pertinent NCUA regulation, 12 CFR § 701.31.
- Determine whether the cooperative credit union victimized members of several safeguarded classes in any aspect of its residential real estate-related deals.
- Determine whether the cooperative credit union remains in compliance with those requirements of the FHAct stated in HUD's implementing regulation and the NCUA's appropriate guideline.
Exam Procedures
1. Determine whether the board has embraced policies, treatments, and basic underwriting requirements worrying nondiscrimination in loaning which authorities review nondiscrimination policies, loan underwriting requirements, and associated service practices regularly. In order to ensure compliance with the FHAct, the policies, procedures, and requirements must, at a minimum state that the credit union does not discriminate in domestic 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 forbid the staff members from making declarations that would dissuade the invoice 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 representatives in the domestic lending process worrying adherence to and understanding of the cooperative credit union's nondiscrimination policies and procedures along with any relevant operating practices.
4. Review any available data regarding the geographic circulation of the cooperative credit union's loan originations with respect to the race and nationwide original portions of the census tracts within its residential real-estate loaning area.
5. Review declined mortgage loan applications to determine if the cooperative credit union has engaged in restricted 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 strict terms (e.g. down payments, rate of interest, terms, charges, loan quantities, etc) for residential real estate-related loans in particular geographical areas situated reasonably within its operational location ( § 701.31( b)( 3 )). If the credit union has set more strict terms, conduct a review of loans made in that geographic area to determine whether the credit union's usage of more strict standards had a lawfully adequate reason.
7. Determine that the credit union has not set an arbitrary limit on loan size and the income required before giving a loan.
8. Determine from the loan review 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 cooperative credit union is not using appraisals or the appraisal process to discriminate ( § 701.31( c)). Ensure the credit union refrains from marking down evaluated values, e.g., lowering the evaluated worth of a residential or commercial property due to its location or some unfavorable discuss the appraisal type.
10. Review authorized and turned down loan applications to make sure the cooperative credit union uniformly applied financial elements consisting of but not restricted to: - Income and financial obligation ratios;
- Credit rating;
- Security residential or commercial property;
- Neighborhood facilities;
- Personal possessions.
11. Review the suitable loan records to identify whether the cooperative credit union administers the following without predisposition ( § 701.31): - Loan adjustments;
- Loan presumptions;
- Additional security requirements;
- Late charges;
- Reinstatement fees;
- Collections.
- Visually determine whether the cooperative credit union has an Equal Housing Lender Poster conspicuously placed in all of the cooperative credit union's workplaces and that all nondiscrimination notices abide by the requirements of § 701.31(d).
