Created by the U.S. Congress in 1970, the National Cooperative Credit Union Administration is an independent federal firm that guarantees deposits at federally insured cooperative credit union, protects the members who own credit unions, and charters and regulates federal cooperative credit union.
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4. > Federal Consumer Financial Protection Guide
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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 changed. FHAct makes it unlawful for lending institutions to victimize anybody in making readily available a domestic real estate-related deal or to discourage an applicant from sending a loan application based on race, color, nationwide origin, religion, sex, familial status, or handicap.
In specific, FHAct applies to funding or purchasing a mortgage loan secured by property genuine estate. Specifically, a loan provider may not deny a loan or other monetary support for the function of acquiring, constructing, enhancing, fixing, or maintaining a home on any of the prohibited bases noted above. FHAct likewise makes it unlawful for a lender to use a restricted 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 lending institution might not express, orally or in composing, a preference based upon any restricted elements or indicate that it will deal with applicants differently on a restricted basis, even if the lender did not act on that declaration. An infraction might still exist even if a loan provider dealt with applicants similarly.
In addition, because property real estate-related transactions consist of any transactions protected by residential realty, FHAct's restrictions (and regulatory requirements in particular areas, such as marketing) apply to home equity lines of credit as well as to home purchase and refinancing loans. These prohibitions also use to the selling, brokering, or appraising of residential genuine residential or commercial property and to secondary mortgage market activities. Consequently, a cooperative credit union's policies, procedures and practices including housing finance need to be broadly examined to make sure that the cooperative credit union does not otherwise make unavailable or deny housing.
Sexual Preference and Gender Identity
Although FHAct does not expressly forbid discrimination based upon sexual orientation or gender identity, HUD resolved gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by releasing the Equal Access to Housing in HUD Programs Despite Sexual Preference or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule applies to housing assisted or insured by HUD, thus affecting Federal Housing Administration-approved loan providers and others taking part in HUD programs. Specifically, a determination of eligibility for housing that is assisted by HUD or subject to a mortgage insured by the Federal Housing Administration shall be made in accordance with the eligibility requirements attended to such program by HUD, and such housing shall be made readily available 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 became effective on March 5, 2012.
Fair Housing Act (FHAct, 42 U.S.C. § 3601) can be found 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 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 discovered 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 threats can happen from unfavorable evaluations or examinations, which might lead to public or non-public enforcement actions with substantial fines and/or charges. Evidence of a "pattern or practice" of discrimination may result in a recommendation to the U.S. Department of Justice.
Reputational danger can take place when the cooperative credit union fails to adhere to 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 unfavorable promotion or declined subscription confidence as a result of failure to abide by the FHAct.
Examination Objectives
- Determine whether the credit union has actually developed policies, treatments, and internal controls to make sure that it is in compliance with FHAct, its carrying out regulation 24 CFR Part 100, and the pertinent NCUA regulation, 12 CFR § 701.31.
- Determine whether the cooperative credit union victimized members of several protected classes in any element of its property genuine estate-related deals.
- Determine whether the cooperative credit union is in compliance with those requirements of the FHAct set forth in HUD's carrying out policy and the NCUA's pertinent policy.
Exam Procedures
1. Determine whether the board has actually embraced policies, treatments, and basic underwriting requirements concerning nondiscrimination in lending which authorities review nondiscrimination policies, loan underwriting standards, and associated company practices regularly. In order to guarantee compliance with the FHAct, the policies, procedures, and requirements must, at a minimum state that the cooperative 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 prohibit the employees from making declarations 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 employees or agents in the domestic lending process concerning adherence to and understanding of the cooperative credit union's nondiscrimination policies and treatments in addition to any appropriate operating practices.
4. Review any offered information concerning the geographical distribution of the cooperative credit union's loan originations with regard to the race and nationwide original percentages of the census tracts within its property real-estate loaning location.
5. Review turned down mortgage loan applications to identify if the cooperative credit union has taken part in restricted practices, including discrimination on the basis of: - The racial structure of a location;
- The income 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 strict terms (e.g. down payments, rate of interest, terms, charges, loan quantities, and so on) for residential real estate-related loans in certain geographical locations located reasonably within its operational location ( § 701.31( b)( 3 )). If the cooperative credit union has actually set more strict terms, conduct an evaluation of loans made in that geographical area to identify whether the credit union's usage of more rigid requirements had a legally enough validation.
7. Determine that the cooperative credit union has not set an arbitrary limit on loan size and the income required before giving 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 cooperative credit union is not using appraisals or the appraisal process to discriminate ( § 701.31( c)). Ensure the cooperative credit union refrains from marking down appraised values, e.g., decreasing the assessed worth of a residential or commercial property due to its place or some unfavorable talk about the appraisal kind.
10. Review approved and declined loan applications to guarantee the cooperative credit union consistently applied economic factors including but not restricted to: - Income and debt ratios;
- Credit report;
- Security residential or commercial property;
- Neighborhood features;
- Personal assets.
11. Review the appropriate loan records to identify whether the cooperative credit union administers the following without predisposition ( § 701.31): - Loan adjustments;
- Loan assumptions;
- Additional collateral requirements;
- Late charges;
- Reinstatement costs;
- Collections.
- Visually determine whether the credit union has an Equal Housing Lender Poster conspicuously put in all of the cooperative credit union's workplaces and that all nondiscrimination notices adhere to the requirements of § 701.31(d).
