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Fair Lending

Fair lending has never been more critical for financial institutions. The expectations from the regulatory agencies have increased in recent years driven by the Dodd-Frank Act, creation of the Consumer Financial Protection Bureau (CFPB), and ever-increasing enforcement action penalties, among others. Banks must have effective compliance programs that evaluate and mitigate risk, including sophisticated statistical analytics capabilities.

Treliant has experts in fair lending that help institutions develop, evaluate, and implement fair lending compliance programs. Rather than simply identifying gaps or making recommendations, Treliant’s experts will help banks put into practice the tools and processes necessary for an effective program.

Our clients rely on our regulatory knowledge and industry experience to meet current mandates and achieve compliance and business objectives.

Treliant's Fair Lending Advisory Services include:

Developing a Robust Fair Lending Risk Assessment Process

  • Objective Ratings
  • Identifying and Evaluating Controls
  • A Proven Formalized Methodology
  • Fair Lending Risk Statements and Questionnaires
  • Risk Performance Outputs for Management and Regulatory Reporting
  • Flexible Platform for Manual or Automated Integration with Governance, Risk, and Compliance (GRC) and Enterprise Risk Management (ERM) systems

Governance for Fair Lending

  • Board-Appointed Fair Lending Officer
  • Board/Executive-Level Fair Lending Committee or Working Groups
  • Committee Charter
  • Fair Lending Staffing, Sufficiency, Roles and Responsibilities
  • Formalized Meetings
  • Effective, Auditable Minutes
  • Reporting Protocols and Corrective Action Oversight
  • Formalized Documentation (including Program Document, Policy, and Procedures)

Developing and Performing Robust Statistical Testing

  • Regular (Quarterly, Semi-Annual, or Annual) Statistical and Regression Analyses
  • Data Validation and Testing
  • Data Integrity (“Scrub”) and Data Collection Process Improvement
  • Penetration and Ratio Analyses
  • Regression (including Triggers for Detailed Review)
  • Fair Lending Statistical Model Validation
  • Redlining Reviews for All Loan Types (including Branch Placement and Service Offerings)
    • Consumer, Commercial, and Indirect Auto Loan Testing, including Proxy Assignment and Consideration of Underwriting and Pricing Factors
  • Matched-Pair Testing
  • Detailed File Review (when necessary)
  • Design, Follow-Up, and Verification of Action Plan Effectiveness

Monitoring Controls and Second Reviews of Denials

  • Methodology
  • Outcomes
  • Reporting
  • Validation

Special Assistance in Areas with High Fair Lending Risk

  • Private Banking
  • Small-Business Lending
  • Servicing, including Collections, Loss Mitigation, Repossession, and Foreclosure
  • External Influences such as Brokers, the Press, and Community Activist Groups

Comprehensive Fair Lending Training

  • Real-Life Examples and Scenarios
  • Job-Specific Content Tailored to Your Institution
  • Development of an Ongoing Training Program

Regulatory Reporting and Response Preparation

  • Exam Preparation
  • Exam Response
  • Home Mortgage Disclosure Act (HMDA) and Community Reinvestment Act (CRA) Data Integrity (“Data Scrubs”)
  • Data Collection Process Improvement

Providing Critical Advice and Solutions in Other Areas, including:

  • Develop and Implement Robust Processes for Marketing, Product, and Service Reviews
  • Fair Lending Review of Existing and New Branch Locations
  • Coordinate with Community Reinvestment Act (CRA) Activities and Planning
  • Analysis of Discretionary Processes (Exceptions and Overrides)
  • Crisp, Comprehensive Policy and Procedures for Fair Lending on an Enterprise-Wide Basis
  • Capturing and Monitoring Fair Lending Complaints
  • Develop Fair and Responsible Banking Programs, including Unfair, Deceptive, or Abusive Acts or Practices (UDAAP)
  • Coordination of the Interactions between the Fair Housing Act, Equal Credit Opportunity Act (ECOA), Community Reinvestment Act (CRA), Home Mortgage Disclosure Act (HMDA), and Unfair, Deceptive, or Abusive Acts or Practices (UDAAP)

Carl G. Pry, Managing Director of Treliant Risk Advisors, addresses Fair Lending compliance and the need for banks to have a Compliance Management System (CMS) in place.

Contacts

Regulatory Compliance

Treliant has the advisory expertise and technical capacity to assess your compliance and fair lending programs, advise on necessary changes, and assist with implementation.

Learn more about Treliant's Regulatory Compliance Advisory Services.



Affiliated with Treliant Risk Advisors, Treliant Solutions is a RegTech software provider that offers RiskExec, a leading technology suite for Fair Lending compliance.