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Fair Lending

Top 10 Lending Compliance Blogs of 2020

December 23, 2020 | Posted by Kimberly Boatwright, CRCM, CAMS
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11 Minute Read

As 2020 draws to a close, we’re taking a moment to look back on an unprecedented year. Responding to the COVID-19 pandemic, Congress passed the CARES Act, creating the Paycheck Protection Program (PPP) and temporarily modifying some consumer rules—requiring financial institutions to revisit existing policies and procedures and, in some instances, create new ones.

The Office of the Comptroller of the Currency (OCC) released its final Community Reinvestment Act (CRA) modernization rule. Meanwhile, existing lending compliance regulations remain a concern while evidence suggests that interest in Fair Lending enforcement is picking up.

As we head into 2021, we’ve put together our top 10 lending compliance blogs of 2020. From enforcement actions to insights for managing compliance with PPP and other elements of the CARES Act, these articles will help you make sure you’re up to date on the latest in lending compliance.

1. Wells Fargo Settles Philadelphia Fair Lending Suit for $10 Million
Wells Fargo recently settled a suit filed by the city of Philadelphia for allegedly 
steering minorities into high-cost, higher-risk mortgage loans for $10 million without admitting wrongdoing. (The bank released a statement saying it “strongly disputed the allegations made by the city in the lawsuit over Fair Housing Act claims.”)

This was one of the first such suits since the Supreme Court rules in May 2017 that cities could sue banks for discriminatory mortgage lending if they could prove direct harm. This lawsuit could have been avoided if Wells Fargo had been proactively managing discrimination risk by analyzing fair lending data

2. Fair Lending Enforcement Is Heating Up: Avoid These 3 Mistakes
It’s been a busy summer for lending compliance enforcement. Both the Consumer Financial Protection Bureau (CFPB) and the Justice Department have been cracking down on Fair Lending and deceptive loan marketing.

What kind of actions are drawing scrutiny? Here are three examples and how to make sure you avoid them.

3. 8 Red Flags Indicating Potential Fair Lending Risk
Risk management is all about identifying, measuring, monitoring, and controlling risk, and fair lending risk is no exception. When assessing Fair Lending risk, it’s not just what your financial institution is doing. It’s also what it’s not doing. Read on for eight red flags that may indicate potential fair lending risk.

4. CFPB Fines Mortgage Company $150,000 for Deceiving Veterans: What Went Wrong?
Another day, another consent order
 against a mortgage company from the Consumer Financial Protection Bureau (CFPB). The CFPB has ordered a California-based mortgage company licensed in at least 11 states to pay a $150,000 civil money penalty after sending over 700,009 consumers, including U.S. service members and veterans, misleading or deceptive mailers for VA-guaranteed mortgage loans. Let’s take a look at what the CFPB says the mortgage company was doing wrong.

5. OCC Says Fair Lending Risk Is on the Rise
Just when you think the COVID-19 pandemic can’t make life and work anymore challenging, the Office of the Comptroller of the Currency has reminded us that the ongoing crisis has created an environment of increased Fair Lending risk.

In its Spring 2020 Semiannual Risk Perspective, the OCC notes that overall compliance risk is increasing, calling out Fair Lending risk in particular.

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6. Tips for Prepping Commercial Lenders for Fair Lending Changes Ahead
Commercial lenders have a reputation for thinking they don’t need to worry about compliance and fair lending. A commercial lender’s bottom line is the bottom line. They don’t want to “waste” time on anything that doesn’t generate revenue.

But that mindset may end up costing the bottom line in the years ahead. The Consumer Finance Protection Bureau (CFPB) has announced that it’s planning to finally begin the rulemaking process of implementing Section 1071 of the Dodd-Frank Act, which will require the collection and reporting credit application data submitted by women- and minority-owned businesses. A final rule is expected to be issued as soon as 2022.

Don’t wait until rule implementation to promote a culture of compliance in your commercial lending department. Here are some talking points for helping your commercial lenders understand why they should care about compliance and fair lending.

7. Fair Lending Pitfall #3: The CARES Act & PPP
In this third blog in our series on the CARES Act and its potential fair lending pitfalls, we’re looking at the PPP program, which was designed to help small businesses weather the COVID-19 storm by keeping workers on payroll. (See previous stories on reporting and delinquencies and mortgage loan servicing.)

8. Fair Lending Pitfalls: The CARES Act & Mortgage Loan Servicing
In this first blog in our series on the CARES Act and its potential fair lending pitfalls, we’ll focus on some of the fair lending challenges Mortgage Loan Servicers face as a result of the temporary servicing fixes of the CARES Act.

9. Fair Lending Pitfalls #2: The CARES Act & Reporting Delinquencies
In this second blog in our series on the CARES Act and its potential fair lending pitfalls, we’ll explore the temporary changes to delinquency reporting and dispute resolution and how they impact fair lending.

10. 6 Tips for Telling Your PPP Fair Lending Story
Last week we told you how important it is to be able to tell your Paycheck Protection Program (PPP) story
. Now we’re giving you key points to help you do it. Here’s how can you be sure your FI’s PPP activities are aligned with Fair Lending and pose no risk to your reputation or regulatory exam results.

Kimberly Boatwright, CRCM, CAMS

Kimberly Boatwright, CRCM, CAMS

Kimberly Boatwright has more than two decades of experience working in compliance and risk management in the financial services industry. Ms. Boatwright is a Certified Anti-Money Certified Laundering Specialist (CAMS) as well as and Certified Regulatory Compliance Manager (CRCM). She specializes in development and implementation of risk assessments for AML, fair lending, and compliance management systems. During Ms. Boatwright’s career, she has worked with traditional banks, credit unions, mortgage and lending companies, prepaid and payments industry.