HUD Restores ‘Discriminatory Effects’ Rule
- Source: hud.gov
Treliant’s experts can help financial institutions adjust their fair lending compliance programs to align with the newly restored 2013 discriminatory effects rule. Treliant provides fair lending services to ensure clients’ policies and practices do not have unjustified discriminatory effects on any protected class. With extensive experience in conducting risk assessments and enhancing world-class compliance management systems, we help financial institutions maintain compliance with fair lending laws and regulations, ultimately promoting a housing market free from discrimination. Trust Treliant to provide the expertise you need to navigate the complex terrain of fair lending compliance.
Financial institutions that operate in the housing market will need to adjust their fair lending compliance programs to align with the newly restored 2013 discriminatory effects rule. This rule has a significant impact on lending practices, zoning requirements, and property insurance policies that could have unjustified discriminatory effects on protected classes.
Considerations: below are some examples of how financial institutions will need to adjust their fair lending compliance programs:
- The rule impacts lending practices, zoning requirements, and property insurance policies that could have discriminatory effects on protected classes and evaluate if these are necessary to achieve a substantial, legitimate, nondiscriminatory interest or if a less discriminatory alternative (LDA) exists to serve that interest.
- Financial institutions operating in the housing market should continue to monitor their fair lending compliance programs to align with the restored 2013 discriminatory effects rule, including these key areas:
- Lending policies, zoning requirements, and property insurance policies to ensure compliance with the new rule.
- Risk assessments to determine whether their policies have an unjustified discriminatory effect on protected classes.
- Training for employees on the new rule to ensure compliance.
Timing: the final rule will go into effect 30 days after it is published in the Federal Register, however, due to a preliminary injunction staying the implementation of the 2020 Rule (which never went into effect), regulated entities can utilize the practices utilized for compliance of the 2013 Rule.