Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal firm that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and manages 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 Liberty Act of 1968, as amended. FHAct makes it illegal for loan providers to victimize anybody in making readily available a residential genuine estate-related transaction or to dissuade an applicant from submitting a loan application based on race, color, nationwide origin, religious beliefs, sex, familial status, or handicap.
In particular, FHAct applies to financing or purchasing a mortgage loan protected by domestic realty. Specifically, a lending institution may not reject a loan or other financial support for the function of getting, constructing, improving, fixing, or preserving a residence on any of the prohibited bases noted above. FHAct likewise makes it unlawful for a lending institution to utilize a restricted basis to discriminate in setting the terms or conditions of credit, such as the loan amount, rate of interest, or duration of the loan on a prohibited basis.
Furthermore, a loan provider may not reveal, orally or in composing, a preference based upon any forbidden aspects or suggest that it will treat candidates differently on a prohibited basis, even if the lending institution did not act upon that statement. An infraction might still exist even if a lender dealt with candidates similarly.
In addition, since domestic genuine estate-related deals consist of any transactions protected by residential genuine estate, FHAct's prohibitions (and regulative requirements in specific areas, such as advertising) apply to home equity lines of credit as well as to home purchase and refinancing loans. These restrictions also apply to the selling, brokering, or appraising of property genuine residential or commercial property and to secondary mortgage market activities. Consequently, a credit union's policies, treatments and practices including housing financing must be broadly examined to ensure that the cooperative credit union does not otherwise make unavailable or deny housing.
Sexual Orientation and Gender Identity
Although FHAct does not specifically forbid discrimination based on sexual preference or gender identity, HUD attended to gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by providing the Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule uses to housing helped or insured by HUD, consequently affecting Federal Housing Administration-approved lenders and others taking part in HUD programs. Specifically, a decision of eligibility for housing that is assisted by HUD or subject to a mortgage insured by the Federal Housing Administration shall be made in accordance with the eligibility requirements provided for such program by HUD, and such housing shall 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 ended up being reliable 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 discovered here
For Equal Access to Housing in HUD Programs Regardless of Sexual Preference and Gender Identity (Equal Access Rule) can be discovered here
NCUA Rules and Regulations 12 CFR § 701.31 can be found here
Definitions utilized 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 found here
Associated Risks.
Exam Objectives.
Exam Procedures.
Checklist
Associated Risks
Compliance dangers can take place from unfavorable evaluations or examinations, which could lead to public or non-public enforcement actions with significant fines and/or charges. Evidence of a "pattern or practice" of discrimination may lead to a referral to the U.S. Department of Justice.
Reputational risk can take place when the cooperative credit union stops working to abide by the FHAct and individual or class action lawsuits are brought against the cooperative credit union it incurs fines and charges through public enforcement actions or gets unfavorable promotion or decreased subscription confidence as an outcome of failure to adhere to the FHAct.
Examination Objectives
- Determine whether the credit union has developed policies, treatments, and internal controls to guarantee that it remains in compliance with FHAct, its executing regulation 24 CFR Part 100, and the relevant NCUA regulation, 12 CFR § 701.31.
- Determine whether the credit union discriminated against members of several safeguarded classes in any element of its residential genuine estate-related deals.
- Determine whether the credit union remains in compliance with those requirements of the FHAct stated in HUD's executing guideline and the NCUA's pertinent guideline.
Exam Procedures
1. Determine whether the board has adopted policies, treatments, and basic underwriting standards worrying nondiscrimination in loaning and that officials review nondiscrimination policies, loan underwriting requirements, and associated company practices frequently. In order to guarantee compliance with the FHAct, the policies, treatments, and standards must, at a minimum state that the cooperative credit union does not discriminate in property genuine 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 prohibit the staff members from making declarations that would discourage the receipt or factor to consider of any application for a loan or other credit service.
3. Conduct interviews of loan officers and other workers or representatives in the domestic financing procedure worrying adherence to and understanding of the credit union's nondiscrimination policies and treatments in addition to any pertinent operating practices.
4. Review any offered data relating to the geographical distribution of the cooperative credit union's loan originations with regard to the race and nationwide original percentages of the census tracts within its domestic real-estate financing location.
5. Review turned down mortgage loan applications to determine if the credit union has actually taken part in prohibited practices, including discrimination on the basis of: - The racial structure of an area;
- The income level of a location; or
- The language of an applicant( s).
6. Review the cooperative credit union's practices, records, and reports to determine if it sets more stringent terms (e.g. down payments, rates of interest, terms, charges, loan quantities, and so on) for property genuine estate-related loans in certain geographical areas located fairly within its functional area ( § 701.31( b)( 3 )). If the cooperative credit union has set more stringent terms, perform an evaluation of loans made because geographical area to identify whether the credit union's usage of more rigid standards had a legally sufficient reason.
7. Determine that the cooperative credit union has not set an approximate limit on loan size and the income needed before granting a loan.
8. Determine from the loan evaluation whether the credit union makes an out of proportion variety 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 process to discriminate ( § 701.31( c)). Ensure the cooperative credit union refrains from marking down appraised values, e.g., lowering the evaluated worth of a residential or commercial property due to its area or some negative talk about the appraisal kind.
10. Review approved and rejected loan applications to make sure the cooperative credit union evenly applied economic aspects consisting of but not limited to: - Income and debt ratios;
- Credit rating;
- Security residential or commercial property;
- Neighborhood facilities;
- Personal assets.
11. Review the appropriate loan records to determine whether the credit union administers the following without predisposition ( § 701.31): - Loan modifications;
- Loan presumptions;
- Additional collateral requirements;
- Late charges;
- Reinstatement charges;
- Collections.
- Visually figure out whether the credit union has an Equal Housing Lender Poster conspicuously placed in all of the cooperative credit union's workplaces which all nondiscrimination notifications comply with the requirements of § 701.31(d).
