Fair Housing Act (FHA).
Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally guaranteed cooperative credit union, protects the members who own credit unions, and charters and controls federal credit unions.
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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 implemented by the Department of Housing and Urban Development's (HUD) regulations (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 unlawful for lenders to discriminate versus anybody in providing a property real estate-related transaction or to discourage a candidate from sending a loan application based upon race, color, national origin, religion, sex, familial status, or handicap.
In particular, FHAct applies to financing or buying a mortgage loan secured by residential property. Specifically, a lending institution might not reject a loan or other monetary assistance for the purpose of buying, constructing, improving, repairing, or maintaining a residence on any of the prohibited bases noted above. FHAct likewise makes it illegal for a lender to use a prohibited basis to discriminate in setting the terms or conditions of credit, such as the loan amount, interest rate, or duration of the loan on a prohibited basis.
Furthermore, a lender may not express, orally or in writing, a choice based on any restricted elements or show that it will deal with candidates differently on a prohibited basis, even if the lender did not act upon that declaration. An infraction might still exist even if a lender treated applicants similarly.
In addition, since domestic real estate-related transactions consist of any transactions protected by domestic genuine estate, FHAct's prohibitions (and regulatory requirements in specific areas, such as marketing) use to home equity credit lines as well as to home purchase and refinancing loans. These prohibitions likewise use to the selling, brokering, or appraising of domestic genuine residential or commercial property and to secondary mortgage market activities. Consequently, a credit union's policies, treatments and practices involving housing financing must be broadly analyzed to guarantee that the credit union does not otherwise make unavailable or deny housing.
Sexual Orientation and Gender Identity
Although FHAct does not expressly prohibit discrimination based on sexual orientation or gender identity, HUD dealt with gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by issuing the Equal Access to Housing in HUD Programs Despite Sexual Orientation or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule uses to housing assisted or insured by HUD, thus 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 guaranteed 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 offered without regard to real 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 effective 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 No Matter Sexual Preference and Gender Identity (Equal Access Rule) can be found here
NCUA Rules and Regulations 12 CFR § 701.31 can be discovered here
Definitions utilized in:
- FHAct (42 U.S.C. § 3602) can be found 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 found here.
- NCUA Rules and Regulations (12 CFR § 701.31( a)) can be discovered here
Associated Risks. Exam Objectives. Exam Procedures. Checklist
Associated Risks
Compliance risks can take place from negative evaluations or examinations, which could cause public or non-public enforcement actions with considerable 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 take place when the credit union stops working to abide by the FHAct and specific or class action lawsuits are brought versus the credit union it sustains fines and penalties through public enforcement actions or receives negative publicity or decreased subscription confidence as a result of failure to adhere to the FHAct.
Examination Objectives
- Determine whether the credit union has actually established policies, treatments, and internal controls to ensure that it is in compliance with FHAct, its executing policy 24 CFR Part 100, and the appropriate NCUA policy, 12 CFR § 701.31. - Determine whether the cooperative credit union victimized members of one or more protected classes in any aspect of its residential genuine estate-related transactions.
- Determine whether the cooperative credit union remains in compliance with those requirements of the FHAct stated in HUD's implementing regulation and the NCUA's appropriate guideline.
Exam Procedures
1. Determine whether the board has embraced policies, treatments, and general underwriting requirements concerning nondiscrimination in lending which officials examine nondiscrimination policies, loan underwriting standards, and associated business practices routinely. In order to ensure compliance with the FHAct, the policies, procedures, and standards must, at a minimum state that the cooperative credit union does not discriminate in property genuine 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 employees from making statements that would dissuade the invoice 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 property loaning procedure worrying adherence to and understanding of the cooperative credit union's nondiscrimination policies and treatments along with any relevant operating practices.
4. Review any available data relating to the geographic circulation of the cooperative credit union's loan originations with regard to the race and national initial portions of the census tracts within its residential real-estate financing area.
5. Review declined mortgage loan applications to figure out if the cooperative credit union has actually participated in prohibited practices, including discrimination on the basis of: - The racial composition of an area; - The earnings level of an area; or
- The language of an applicant( s).
6. Review the credit union's practices, records, and reports to figure out if it sets more stringent terms (e.g. down payments, rate of interest, terms, costs, loan amounts, and so on) for property genuine estate-related loans in specific geographical areas located fairly within its operational location ( § 701.31( b)( 3 )). If the cooperative credit union has set more stringent terms, conduct an evaluation of loans made because geographic location to figure out whether the cooperative credit union's use of more strict standards had a lawfully adequate validation.
- Determine that the cooperative credit union has not set an approximate limit on loan size and the income required before approving a loan.
8. Determine from the loan evaluation whether the cooperative 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 credit union is not using appraisals or the appraisal procedure to discriminate ( § 701.31( c)). Ensure the cooperative credit union avoids marking down evaluated values, e.g., reducing the appraised worth of a residential or commercial property due to its location or some negative talk about the appraisal type. - Review authorized and declined loan applications to guarantee the credit union consistently used financial elements consisting of but not restricted to: - Income and debt ratios;
- Credit report;
- Security residential or commercial property;
- Neighborhood facilities;
- Personal assets.
11. Review the proper loan records to determine whether the cooperative credit union administers the following without predisposition ( § 701.31): - Loan modifications; - Loan presumptions;
- Additional security requirements;
- Late charges;
- Reinstatement fees;
- Collections.
- Visually identify whether the cooperative credit union has an Equal Housing Lender Poster notably placed in all of the credit union's workplaces which all nondiscrimination notifications adhere to the requirements of § 701.31(d).
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