Fair Housing Act (FHA).
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4. > Federal Consumer Financial Protection Guide
5. > Compliance Management
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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 ( 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 Rights Act of 1968, as amended. FHAct makes it illegal for loan providers to victimize anybody in making available a property real estate-related transaction or to dissuade an applicant from sending a loan application based on race, color, national origin, religion, sex, familial status, or handicap.
In specific, FHAct uses to financing or buying a mortgage loan protected by domestic property. Specifically, a lender may not reject a loan or other monetary assistance for the function of purchasing, building, improving, fixing, or preserving a home on any of the prohibited bases kept in mind above. FHAct likewise makes it unlawful for a lending institution to utilize a forbidden basis to discriminate in setting the terms or conditions of credit, such as the loan quantity, rate of interest, or duration of the loan on a restricted basis.
Furthermore, a loan provider might not express, orally or in composing, a preference based upon any prohibited factors or show that it will deal with candidates in a different way on a forbidden basis, even if the loan provider did not act on that statement. A violation may still exist even if a loan provider dealt with candidates similarly.
In addition, since property real estate-related deals consist of any deals protected by residential genuine estate, FHAct's restrictions (and regulative requirements in certain areas, such as advertising) use to home equity lines of credit in addition to to home purchase and refinancing loans. These prohibitions also use to the selling, brokering, or appraising of property genuine residential or commercial property and to secondary mortgage market activities. Consequently, a cooperative credit union's policies, procedures and practices involving housing financing should be broadly taken a look at to guarantee that the cooperative credit union does not otherwise make not available or deny housing.
Sexual Orientation and Gender Identity
Although FHAct does not expressly forbid discrimination based upon sexual orientation or gender identity, HUD dealt with 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 helped or guaranteed by HUD, consequently impacting Federal Housing Administration-approved lenders and others getting involved in HUD programs. Specifically, a determination of eligibility for housing that is helped by HUD or subject to a mortgage insured by the Federal Housing Administration will be made in accordance with the eligibility requirements offered such program by HUD, and such housing shall be made 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 ended up being efficient 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 Regardless of 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 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 found 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 discovered here
Associated Risks. Exam Objectives. Exam Procedures. Checklist
Associated Risks
Compliance dangers can take place from negative evaluations or examinations, which might cause public or non-public enforcement actions with significant fines and/or charges. Evidence of a "pattern or practice" of discrimination might result in a referral to the U.S. Department of Justice.
Reputational risk can occur when the cooperative credit union stops working to abide by the FHAct and private or class action suits are brought versus the credit union it sustains fines and penalties through public enforcement actions or receives negative promotion or decreased membership self-confidence as an outcome of failure to comply with the FHAct.
Examination Objectives
- Determine whether the credit union has actually established policies, procedures, and internal controls to ensure that it remains in compliance with FHAct, its carrying out guideline 24 CFR Part 100, and the appropriate NCUA regulation, 12 CFR § 701.31. - Determine whether the cooperative credit union discriminated versus members of one or more protected classes in any aspect of its residential real estate-related transactions.
- Determine whether the credit union is in compliance with those requirements of the FHAct set forth in HUD's executing policy and the NCUA's appropriate policy.
Exam Procedures
1. Determine whether the board has embraced policies, procedures, and general underwriting standards worrying nondiscrimination in lending and that officials evaluate nondiscrimination policies, loan underwriting standards, and associated organization practices frequently. In order to ensure compliance with the FHAct, the policies, treatments, and standards must, at a minimum state that the credit union does not discriminate in residential real 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 credit union has policies that restrict the workers from making statements that would discourage the receipt or consideration of any application for a loan or other credit service.
3. Conduct interviews of loan officers and other workers or representatives in the property loaning procedure worrying adherence to and understanding of the cooperative credit union's nondiscrimination policies and procedures in addition to any pertinent operating practices.
4. Review any available information relating to the geographic circulation of the cooperative credit union's loan originations with respect to the race and nationwide initial percentages of the census tracts within its property real-estate loaning area.
5. Review declined mortgage loan applications to determine if the cooperative credit union has actually engaged in prohibited practices, consisting of discrimination on the basis of: - The racial composition of an area; - The income level of an area; or
- The language of an applicant( s).
6. Review the cooperative credit union's practices, records, and reports to identify if it sets more strict terms (e.g. down payments, rate of interest, terms, costs, loan quantities, and so on) for domestic real estate-related loans in particular geographical areas situated reasonably within its functional area ( § 701.31( b)( 3 )). If the cooperative credit union has set more strict terms, conduct an evaluation of loans made in that geographical location to determine whether the cooperative credit union's use of more strict standards had a legally adequate reason.
- Determine that the credit union has not set an approximate limit on loan size and the income required before approving a loan.
8. Determine from the loan review whether the credit union makes an out of proportion variety of loans under one kind of financing (e.g., FHA, VA, other alternative mortgage instruments).
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9. Determine the credit union is not using appraisals or the appraisal procedure to discriminate ( § 701.31( c)). Ensure the cooperative credit union refrains from marking down assessed worths, e.g., decreasing the evaluated value of a residential or commercial property due to its place or some unfavorable talk about the appraisal form. - Review authorized and declined loan applications to ensure the credit union evenly used financial factors consisting of however not limited to: - Income and debt ratios;
- Credit rating;
- Security residential or commercial property;
- Neighborhood facilities;
- Personal properties.
11. Review the suitable loan records to identify whether the cooperative credit union administers the following without bias ( § 701.31): - Loan modifications; - Loan presumptions;
- Additional security requirements;
- Late charges;
- Reinstatement charges;
- Collections.
- Visually figure out whether the cooperative credit union has an Equal Housing Lender Poster notably put in all of the credit union's offices which all nondiscrimination notices abide by the requirements of § 701.31(d).
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