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3 Fair Lending Focal Points for the CFPB in 2017

2 min read
Dec 22, 2016

The CFPB recently released their top Fair Lending compliance priorities for 2017. Here they are - and why it matters to you, even if they aren't your regulator.

Patrice Ficklin, the Fair Lending Director at the Consumer Financial Protection Bureau (CFPB), wrote a blog post last week listing the Bureau's top 3 Fair Lending priorities for 2017. They are, in order:

  1. Redlining
  2. Servicing for Mortgages and Student Loans
  3. Small Business Lending

We'll provide a little more info about these three areas later, but first, we wanted to answer a question that a few of you might have: Since the Bureau only directly regulates larger banks, so why should their guidance matter to the community banks, credit unions and mortgage companies?

It matters because the CFPB acts almost as the lead dog of the regulatory agencies. Where the Bureau goes, other regulators are likely to follow.

Examiners at other agencies are considering their guidance, research and publications. The Bureau is large, active, and high-profile. In the banking and financial services industry, even if you wanted to avoid them, you probably couldn't. 

Their top priorities are likely to be among the top priorities for the other regulatory agencies, which is why it matters that all financial institutions pay attention to the CFPB's guidance. 

With that in mind, here is a little more info about the top 3 Fair Lending priorities for the CFPB in 2017:

1. Redlining

Redlining has been a regulatory priority all year, for the CFPB as well as the DOJ, HUD and other regulators. Ficklin wrote that the Bureau will "continue to evaluate whether lenders have intentionally avoided lending in minority neighborhoods."

If you aren't yet analyzing your lending data for Redlining risk, now is the time to start. It has been a priority throughout 2016, and that will continue into 2017.

2. Servicing for Mortgages and Student Loans

The CFPB will be focusing on servicing for mortgages and student loans. "We will determine whether some borrowers who are behind on their mortgage or student loan payments may have more difficulty working out a new solution with the servicer because of their race or ethnicity," Ficklin said.

Make sure that you're considering servicing as you monitor and manage your Fair Lending risk in 2017.

3. Small Business Lending

In 2017, the CFPB will be evaluating lending to ensure that loans are being made to minority- and female-owned small businesses. This focal point is coming from the legislative branch.

According to Ficklin, "Congress expressed concern that women-owned and minority-owned businesses may experience discrimination when they apply for credit." They've required the Bureau to take steps to ensure that minorities and women have fair access to credit.

TRUPOINT Viewpoint: As you work to improve your Fair Lending compliance in the year to come, know that we're here to help. We help hundreds of institutions nationwide monitor, manage and mitigate their Fair Lending risk. 

As you work to prepare for 2017, now is great time to prioritize your goals. Get this free 2017 Compliance eBrief to help get started. It will outline 3 top compliance priorities, and includes two free worksheets to help you plan and prepare. Click the button below to get it!


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