Fair lending is a critical component of a financial institution’s compliance management system. Fair lending risk is the likelihood that a financial institution's lending operations may be found to treat or impact applicants and borrowers differently on a prohibited basis. It includes the potential for a finding of noncompliance with the technical requirements of certain laws and regulations, such as ECOA and Regulation B, along with discrimination and discouragement in the lending process. Fair lending risk potentially encompasses all of a financial institution's lending products - mortgage, consumer, credit card, and commercial - and all its credit-related lending activities from application to closing.
Regulators expect financial institutions to adhere to fair lending laws and regulations. Failure to comply with fair lending laws and regulations could have serious consequences for the Bank and may result in financial, legal, or other harm to consumers. Such failure could also lead to regulatory sanctions, financial losses, and reputational damage to the Bank. Regulators want institutions to be proactive about ensuring that they are in compliance with fair lending laws and regulations. That’s why performing a fair lending risk assessment to see if your institution has any red flags makes more financial sense then waiting for your regulator to find fair lending violations.
Jennifer Newton is a former Federal Financial Services Regulator from the U.S. Consumer Financial Protection Bureau (CFPB) and brings clients more than a decade of consumer compliance management and risk advisory experience. With her combined experience in the federal government, law firm, and in-house compliance positions, Jennifer offers an uncommonly broad range and depth of consumer compliance expertise in banking and financial service matters. She regularly consults with clients on complex issues relating to the Real Estate Settlement Procedures Act (RESPA), Telephone Consumer Protection Act (TCPA), Home Mortgage Disclosure Act (HMDA), the Gramm-Leach-Bliley Act (GLBA) and the Fair Credit Reporting Act (FCRA). She also guides clients on deposit and consumer lending issues under the Unfair Deceptive Abusive Acts and Practices Act (UDAAP), the Truth in Savings Act (TISA), Regulation CC, the CARD Act, Truth in Lending Act (TILA), Equal Credit Opportunity Act (ECOA), the Community Reinvestment Act (CRA) and the Fair Debt Collection Practices Act (FDCPA). In addition, Jennifer works with clients on privacy and financial technology (fintech) matters involving data security, data breach, open banking, and payment system issues under the Electronic Fund Transfer Act (EFTA), the Global Data Privacy Regulation (GDPR) and federal and state privacy laws, including the GLBA, HIPAA, ADA, CFAA, FCRA and the Florida FIPA.