Created by the U.S. Congress in 1970, the National Cooperative Credit Union Administration is an independent federal agency that guarantees deposits at federally insured cooperative credit union, secures the members who own cooperative credit union, and charters and controls 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 implemented by the Department of Housing and Urban Development's (HUD) policies (24 CFR Part 100), was enacted as Sections 800 to 820 of Title VIII of the Civil Liberty Act of 1968, as amended. FHAct makes it illegal for loan providers to discriminate against anyone in offering a residential genuine estate-related deal or to discourage an applicant from submitting a loan application based on race, color, national origin, faith, sex, familial status, or handicap.
In specific, FHAct applies to financing or purchasing a mortgage loan secured by domestic property. Specifically, a lending institution may not reject a loan or other monetary assistance for the purpose of purchasing, building, improving, repairing, or keeping a home on any of the forbidden bases kept in mind above. FHAct also makes it illegal for a lending institution to use a prohibited 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 might not reveal, orally or in composing, a choice based upon any prohibited elements or suggest that it will deal with applicants in a different way on a restricted basis, even if the loan provider did not act on that statement. An offense may still exist even if a lending institution dealt with candidates similarly.
In addition, because property genuine estate-related deals consist of any deals protected by residential realty, FHAct's prohibitions (and regulative requirements in specific locations, such as advertising) apply to home equity lines of credit in addition to 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 finance need to be broadly taken a look at to make sure that the cooperative credit union does not otherwise make not available or reject housing.
Sexual Orientation and Gender Identity
Although FHAct does not specifically restrict discrimination based on 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 No Matter Sexual Orientation or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule applies to housing assisted or guaranteed by HUD, therefore impacting Federal Housing Administration-approved loan providers and others taking part in HUD programs. Specifically, a decision of eligibility for housing that is assisted 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 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 No Matter Sexual Orientation and Gender Identity (Equal Access Rule) can be discovered 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 found here
Associated Risks.
Exam Objectives.
Exam Procedures.
Checklist
Associated Risks
Compliance risks can occur from unfavorable evaluations or examinations, which could result in public or non-public enforcement actions with considerable fines and/or charges. Evidence of a "pattern or practice" of discrimination might lead to a recommendation to the U.S. Department of Justice.
Reputational threat can occur when the credit union fails to adhere to the FHAct and specific or class action suits are brought versus the credit union it incurs fines and charges through public enforcement actions or gets negative promotion or declined membership confidence as a result of failure to comply with the FHAct.
Examination Objectives
- Determine whether the cooperative credit union has established policies, procedures, and internal controls to ensure that it is in compliance with FHAct, its implementing guideline 24 CFR Part 100, and the appropriate NCUA policy, 12 CFR § 701.31.
- Determine whether the cooperative credit union victimized members of one or more secured classes in any element of its domestic real estate-related transactions.
- Determine whether the cooperative credit union remains in compliance with those requirements of the FHAct set forth in HUD's implementing guideline and the NCUA's relevant regulation.
Exam Procedures
1. Determine whether the board has actually adopted policies, procedures, and general underwriting standards concerning nondiscrimination in loaning which authorities examine nondiscrimination policies, loan underwriting standards, and associated service practices regularly. In order to ensure compliance with the FHAct, the policies, procedures, and standards must, at a minimum state that the credit union does not discriminate in property genuine 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 prohibit the employees from making declarations 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 employees or representatives in the domestic lending procedure concerning adherence to and understanding of the credit union's nondiscrimination policies and procedures along with any pertinent operating practices.
4. Review any offered data concerning the geographical distribution 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 rejected mortgage loan applications to determine if the cooperative credit union has actually taken part in prohibited practices, consisting of discrimination on the basis of: - The racial composition of a location;
- The income level of an area; or
- The language of a candidate( s).
6. Review the credit union's practices, records, and reports to identify if it sets more rigid terms (e.g. down payments, interest rates, terms, costs, loan amounts, etc) for domestic genuine estate-related loans in specific geographical locations situated fairly within its operational area ( § 701.31( b)( 3 )). If the cooperative credit union has set more rigid terms, carry out an evaluation of loans made because geographic area to determine whether the credit union's usage of more stringent requirements had a lawfully enough justification.
7. Determine that the credit union has not set an approximate limit on loan size and the income needed before granting a loan.
8. Determine from the loan review whether the cooperative credit union makes a disproportionate number of loans under one type of financing (e.g., FHA, VA, other alternative mortgage instruments).
9. Determine the cooperative credit union is not utilizing appraisals or the appraisal procedure to discriminate ( § 701.31( c)). Ensure the credit union refrains from marking down appraised values, e.g., lowering the appraised worth of a residential or commercial property due to its area or some unfavorable remark on the appraisal kind.
10. Review approved and turned down loan applications to make sure the cooperative credit union evenly used economic elements including however not limited to: - Income and financial obligation ratios;
- Credit report;
- Security residential or commercial property;
- Neighborhood facilities;
- Personal possessions.
11. Review the suitable loan records to identify whether the credit union administers the following without bias ( § 701.31): - Loan modifications;
- Loan assumptions;
- Additional security requirements;
- Late charges;
- Reinstatement charges;
- Collections.
- Visually figure out whether the credit union has an Equal Housing Lender Poster conspicuously positioned in all of the credit union's workplaces and that all nondiscrimination notices adhere to the requirements of § 701.31(d).
