Fair Housing Act (FHA).
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Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that guarantees deposits at federally guaranteed credit unions, protects the members who own cooperative credit union, and charters and manages federal cooperative credit union.
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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 carried out 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 Rights Act of 1968, as amended. FHAct makes it unlawful for lending institutions to discriminate against anyone in making readily available a domestic genuine estate-related transaction or to discourage a candidate from submitting a loan application based on race, color, national origin, faith, sex, familial status, or handicap.
In specific, FHAct uses to financing or acquiring a mortgage loan protected by domestic property. Specifically, a loan provider may not reject a loan or other financial help for the function of acquiring, constructing, improving, fixing, or maintaining a residence on any of the restricted bases kept in mind above. FHAct likewise makes it illegal for a lending institution to utilize a restricted basis to discriminate in setting the terms or conditions of credit, such as the loan quantity, rates of interest, or period of the loan on a prohibited basis.
Furthermore, a loan provider might not reveal, orally or in composing, a preference based upon any prohibited elements or suggest that it will deal with applicants in a different way on a forbidden basis, even if the loan provider did not act upon that declaration. An offense may still exist even if a lending institution treated candidates similarly.
In addition, due to the fact that residential genuine estate-related transactions consist of any deals protected by domestic genuine estate, FHAct's restrictions (and regulative requirements in specific locations, such as marketing) apply to home equity credit lines along with to home purchase and refinancing loans. These restrictions also use to the selling, brokering, or appraising of domestic real residential or commercial property and to secondary mortgage market activities. Consequently, a cooperative credit union's policies, procedures and practices including housing finance should be broadly examined to ensure that the cooperative credit union does not otherwise make unavailable or reject housing.
Sexual Preference and Gender Identity
Although FHAct does not expressly forbid discrimination based upon 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 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 insured by HUD, therefore impacting Federal Housing Administration-approved lenders and others participating in HUD programs. Specifically, a determination of eligibility for housing that is assisted by HUD or based on a mortgage insured by the Federal Housing Administration will be made in accordance with the eligibility requirements attended to such program by HUD, and such housing shall be provided without regard to real or viewed sexual preference, 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 Despite Sexual Orientation and Gender Identity (Equal Access Rule) can be discovered here
NCUA Rules and Regulations 12 CFR § 701.31 can be discovered here
Definitions used in:
- FHAct (42 U.S.C. § 3602) can be discovered here.
- HUD Regulations (24 CFR § 100.20) can be discovered 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 examinations or examinations, which could 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 recommendation to the U.S. Department of Justice.
Reputational threat can take place when the cooperative credit union fails to comply with the FHAct and specific or class action lawsuits are brought versus the credit union it incurs fines and penalties through public enforcement actions or receives negative promotion or decreased subscription confidence as a result of failure to comply with the FHAct.
Examination Objectives
- Determine whether the credit union has established policies, treatments, and internal controls to ensure that it remains in compliance with FHAct, its executing regulation 24 CFR Part 100, and the relevant NCUA policy, 12 CFR § 701.31. - Determine whether the cooperative credit union discriminated against members of one or more secured classes in any aspect of its residential real estate-related deals.
- Determine whether the cooperative credit union remains in compliance with those requirements of the FHAct stated in HUD's implementing policy and the NCUA's relevant policy.
Exam Procedures
1. Determine whether the board has embraced policies, treatments, and general underwriting standards concerning nondiscrimination in lending and that authorities review nondiscrimination policies, loan underwriting requirements, and related business practices frequently. In order to assure compliance with the FHAct, the policies, treatments, and requirements must, at a minimum state that the credit union does not discriminate in domestic real estate-related transactions based on (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 forbid the workers from making declarations that would prevent the receipt or factor to consider of any application for a loan or other credit service.
3. Conduct interviews of loan officers and other staff members or agents in the residential lending procedure worrying adherence to and understanding of the credit union's nondiscrimination policies and treatments in addition to any appropriate operating practices.
4. Review any available information relating to the geographical distribution of the cooperative credit union's loan originations with respect to the race and nationwide original portions of the census systems within its domestic real-estate lending location.
5. Review rejected mortgage loan applications to figure out if the credit union has taken part in prohibited practices, including discrimination on the basis of: - The racial composition of an area; - The earnings level of a location; or
- The language of a candidate( s).
6. Review the cooperative credit union's practices, records, and reports to identify if it sets more rigid terms (e.g. deposits, interest rates, terms, fees, loan amounts, etc) for residential real estate-related loans in certain geographical locations situated fairly within its operational area ( § 701.31( b)( 3 )). If the credit union has set more rigid terms, perform a review of loans made because geographic area to determine whether the credit union's usage of more strict requirements had a lawfully sufficient validation.
- Determine that the credit union has not set an arbitrary limitation on loan size and the earnings required before granting a loan.
8. Determine from the loan review whether the credit union makes an out of proportion number of loans under one type of funding (e.g., FHA, VA, other alternative mortgage instruments).
9. Determine the credit union is not using appraisals or the appraisal procedure to discriminate ( § 701.31( c)). Ensure the credit union avoids marking down assessed worths, e.g., lowering the assessed value of a residential or commercial property due to its place or some negative talk about the appraisal type. - Review authorized and rejected loan applications to make sure the cooperative credit union evenly applied economic elements consisting of but not limited to: - Income and debt ratios;
- Credit rating;
- or commercial property;
- Neighborhood facilities;
- Personal assets.
11. Review the proper loan records to figure out whether the credit union administers the following without bias ( § 701.31): - Loan adjustments; - Loan presumptions;
- Additional collateral requirements;
- Late charges;
- Reinstatement fees;
- Collections.
- Visually determine whether the cooperative credit union has an Equal Housing Lender Poster conspicuously placed in all of the cooperative credit union's offices and that all nondiscrimination notices abide by the requirements of § 701.31(d).