The CFPB Releases 2016 Fair Lending Report

In April, the Bureau released its fair lending report for 2016. The report summarizes enforcement actions and supervisory activities conducted in 2016.

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Managing Underwriting Loan Policy Exceptions

Financial regulatory agencies today are especially focused on risk in their supervision practices. This includes both compliance related matters as well as safety and soundness. 

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ABA Issues Fair Lending White Paper to U.S. Secretary of the Treasury

The ABA has issued a fair lending white paper to Treasury entitled: Fair Lending: Fighting Illegal Discrimination: Promoting Growth for the Whole Community.  The paper raises issues with regard to agency regulation and enforcement efforts generally but, more specifically, focuses on the CFPB. It addresses enforcement of redlining, application of disparate impact, and advocates that […]

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Forms of Fair Lending Discrimination: What the Data Can’t Tell You (Part 2 of 2)

  In this series of posts, we address types of fair lending discrimination that are commonly recognized by the regulatory and enforcement agencies. 

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Forms of Fair Lending Discrimination: What the Data Can’t Tell You (Part 1)

In this series of posts, we address types of fair lending discrimination that are commonly recognized by the regulatory and enforcement agencies. The points covered are risk areas that are often examined in the course of regulatory reviews.  

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Two Problems With Fair Lending and Commercial Loans

There are two major problems with fair lending and commercial loans, but lenders should still be prepared for an increase in scrutiny. The CFPB signaled in December of 2016 that small business lending was one of their priorities for 2017.

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Binary Choice Regression Modeling in Fair Lending Analysis (Part 2 of 2)

In a previous post, we discussed the binary choice regression model which is often employed in evaluating consistency in underwriting with respect to fair lending laws and regulations. Let’s continue the discussion.    

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Binary Choice Regression Modeling in Fair Lending Analysis (Part 1 of 2)

Binary choice models arise when the dependent variable (the measurement variable or what is to be explained) in a regression model y only takes two possible outcomes, generally 0 or 1. For example, it is common in a fair lending analysis of underwriting to regress denial (y=1 if denied, 0 approved) on a target group […]

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Forms of Fair Lending Discrimination: Borrower Age

In this series of posts, we address types of fair lending discrimination that are commonly recognized by the regulatory and enforcement agencies. The points covered are risk areas that are often examined in the course of regulatory reviews. Previously, we’ve covered fees and steering. It is critical to bear in mind that fair lending laws and […]

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Target and Control Group Formulation in Fair Lending Analysis

So you are all prepared to conduct a fair lending analysis. You have determined the focal point(s), to include a product target as well as the prohibited basis and control groups, all of which are topics for another day. Now you are ready to assemble your data and begin conducting the review. In doing so, […]

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