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, secures the members who own credit unions, and charters and regulates 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 executed 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 unlawful for loan providers to discriminate against any individual in making available a domestic real estate-related deal or to prevent a candidate from sending a loan application based upon race, color, national origin, religious beliefs, sex, familial status, or handicap.
In specific, FHAct applies to funding or buying a mortgage loan protected by residential realty. Specifically, a lender might not reject a loan or other monetary support for the function of acquiring, constructing, enhancing, repairing, or keeping a house on any of the forbidden bases noted above. FHAct also makes it unlawful for a lending institution to use a forbidden basis to discriminate in setting the terms or conditions of credit, such as the loan amount, interest rate, or period of the loan on a forbidden basis.
Furthermore, a loan provider may not reveal, orally or in composing, a choice based on any restricted elements or suggest that it will treat candidates differently on a prohibited basis, even if the lender did not act upon that declaration. An infraction may still exist even if a loan provider dealt with applicants similarly.
In addition, because residential real estate-related transactions include any deals secured by domestic property, FHAct's prohibitions (and regulatory requirements in particular areas, such as advertising) use to home equity lines of credit along with to home purchase and refinancing loans. These prohibitions also use to the selling, brokering, or appraising of domestic real residential or commercial property and to secondary mortgage market activities. Consequently, a credit union's policies, treatments and practices including housing financing should be broadly analyzed to ensure that the cooperative 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 dealt with gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by providing the Equal Access to Housing in HUD Programs No Matter 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, thus impacting Federal Housing Administration-approved loan providers and others getting involved 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 for such program by HUD, and such housing shall be made available without regard to real or viewed 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 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 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 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 risks can happen from unfavorable examinations or investigations, which might result in public or non-public enforcement actions with substantial fines and/or penalties. Evidence of a "pattern or practice" of discrimination might lead to a recommendation to the U.S. Department of Justice.
Reputational threat can take place when the credit union fails to adhere to the FHAct and specific or class action suits are brought versus the cooperative credit union it incurs fines and penalties through public enforcement actions or receives negative promotion or decreased subscription self-confidence as an outcome of failure to comply with the FHAct.
Examination Objectives
- Determine whether the cooperative credit union has actually established policies, procedures, and internal controls to guarantee that it is in compliance with FHAct, its implementing guideline 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 element of its property real estate-related transactions.
- Determine whether the credit union is in compliance with those requirements of the FHAct stated in HUD's carrying out regulation and the NCUA's relevant guideline.
Exam Procedures
1. Determine whether the board has actually embraced policies, treatments, and basic underwriting requirements worrying nondiscrimination in loaning and that authorities evaluate nondiscrimination policies, loan underwriting standards, and related company practices routinely. In order to ensure compliance with the FHAct, the policies, treatments, and requirements must, at a minimum state that the credit union does not discriminate in domestic real estate-related deals based on (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 employees from making statements that would dissuade the invoice or consideration of any application for a loan or other credit service.
3. Conduct interviews of loan officers and other staff members or representatives in the property loaning process worrying adherence to and understanding of the credit union's nondiscrimination policies and treatments as well as any relevant operating practices.
4. Review any readily available data regarding the geographical circulation of the cooperative credit union's loan originations with regard to the race and national original percentages of the census tracts within its property real-estate lending area.
5. Review turned down mortgage loan applications to identify if the cooperative credit union has taken part in restricted practices, consisting of discrimination on the basis of: - The racial composition of a location;
- 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 identify if it sets more stringent terms (e.g. deposits, rates of interest, terms, fees, loan amounts, etc) for property real estate-related loans in certain geographical areas situated fairly within its operational area ( § 701.31( b)( 3 )). If the credit union has actually set more rigid terms, conduct a review of loans made because geographic area to figure out whether the cooperative credit union's usage of more stringent requirements had a lawfully enough reason.
7. Determine that the cooperative credit union has not set an arbitrary limit on loan size and the income required before granting a loan.
8. Determine from the loan evaluation whether the credit union makes an out of proportion number of loans under one kind of funding (e.g., FHA, VA, other alternative mortgage instruments).
9. Determine the cooperative credit union is not utilizing appraisals or the appraisal process to discriminate ( § 701.31( c)). Ensure the cooperative credit union refrains from discounting evaluated values, e.g., reducing the appraised worth of a residential or commercial property due to its area or some unfavorable talk about the appraisal kind.
10. Review authorized and declined loan applications to guarantee the cooperative credit union consistently applied economic elements including however not restricted to: - Income and financial obligation ratios;
- Credit report;
- Security residential or commercial property;
- Neighborhood features;
- Personal possessions.
11. Review the appropriate loan records to figure out whether the credit union administers the following without predisposition ( § 701.31): - Loan adjustments;
- Loan presumptions;
- Additional collateral requirements;
- Late charges;
- Reinstatement fees;
- Collections.
- Visually determine whether the cooperative credit union has an Equal Housing Lender Poster notably placed in all of the cooperative credit union's workplaces and that all nondiscrimination notices adhere to the requirements of § 701.31(d).
