Created by the U.S. Congress in 1970, the National Cooperative Credit Union Administration is an independent federal company that guarantees deposits at federally insured cooperative credit union, secures the members who own credit unions, and charters and controls federal cooperative credit union.
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4. > Federal Consumer Financial Protection Guide
5. > Compliance Management
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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 executed by the Department of Housing and Urban Development's (HUD) policies (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 illegal for loan providers to victimize anybody in providing a residential genuine estate-related transaction or to discourage a candidate from sending a loan application based on race, color, nationwide origin, religion, sex, familial status, or handicap.
In specific, FHAct uses to funding or buying a mortgage loan secured by domestic property. Specifically, a lender may not deny a loan or other financial assistance for the function of buying, building, improving, repairing, or keeping a house on any of the prohibited bases kept in mind above. FHAct likewise makes it illegal for a lender to use a forbidden basis to discriminate in setting the terms or conditions of credit, such as the loan amount, rate of interest, or duration of the loan on a restricted basis.
Furthermore, a loan provider might not express, orally or in composing, a preference based upon any restricted elements or suggest that it will treat candidates differently on a restricted basis, even if the lender did not act upon that declaration. An offense may still exist even if a lending institution dealt with applicants similarly.
In addition, due to the fact that domestic genuine estate-related transactions include any transactions secured by domestic real estate, FHAct's prohibitions (and regulatory requirements in specific areas, such as advertising) use to home equity credit lines along with to home purchase and refinancing loans. These restrictions likewise apply to the selling, brokering, or appraising of residential genuine residential or commercial property and to secondary mortgage market activities. Consequently, a credit union's policies, procedures and practices involving housing financing should be broadly taken a look at to make sure that the 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 preference or gender identity, HUD attended to gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by releasing the Equal Access to Housing in HUD Programs No Matter Sexual Preference 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 impacting Federal Housing Administration-approved lending institutions and others participating in HUD programs. Specifically, a determination of eligibility for housing that is assisted by HUD or based on a mortgage insured by the Federal Housing Administration will be made in accordance with the eligibility requirements offered such program by HUD, and such housing will be made readily available without regard to real or perceived sexual preference, gender identity, or marital status. (24 CFR § § 5.100 and 5.105( a)( 2 )). The Equal Access Rule became efficient 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 discovered here
For Equal Access to Housing in HUD Programs Regardless of Sexual Preference and Gender Identity (Equal Access Rule) can be discovered here
NCUA Rules and Regulations 12 CFR § 701.31 can be discovered here
Definitions used in:
- FHAct (42 U.S.C. § 3602) can be found 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 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 found here
Associated Risks.
Exam Objectives.
Exam Procedures.
Checklist
Associated Risks
Compliance risks 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 might lead to a recommendation to the U.S. Department of Justice.
Reputational danger can occur when the credit union stops working to adhere to the FHAct and private or class action suits are brought against the cooperative credit union it sustains fines and penalties through public enforcement actions or gets negative promotion or decreased subscription confidence as an outcome of failure to adhere to the FHAct.
Examination Objectives
- Determine whether the cooperative credit union has actually established policies, treatments, and internal controls to ensure that it is in compliance with FHAct, its executing guideline 24 CFR Part 100, and the pertinent NCUA guideline, 12 CFR § 701.31.
- Determine whether the credit union victimized members of several safeguarded classes in any element of its domestic genuine estate-related transactions.
- Determine whether the credit union remains in compliance with those requirements of the FHAct set forth in HUD's carrying out regulation and the NCUA's relevant policy.
Exam Procedures
1. Determine whether the board has embraced policies, procedures, and general underwriting standards worrying nondiscrimination in financing and that officials examine nondiscrimination policies, loan underwriting standards, and related service practices routinely. In order to assure compliance with the FHAct, the policies, treatments, and standards must, at a minimum state that the credit union does not discriminate in residential real estate-related deals 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 credit union has policies that prohibit the workers 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 employees or agents in the property financing procedure concerning adherence to and understanding of the cooperative credit union's nondiscrimination policies and treatments in addition to any pertinent operating practices.
4. Review any offered data regarding the geographical distribution of the credit union's loan originations with respect to the race and nationwide original percentages of the census tracts within its residential real-estate lending location.
5. Review declined mortgage loan applications to figure out if the cooperative credit union has taken part in prohibited practices, including discrimination on the basis of: - The racial structure of an area;
- The earnings level of an area; or
- The language of a candidate( s).
6. Review the cooperative credit union's practices, records, and reports to figure out if it sets more rigid terms (e.g. down payments, rates of interest, terms, charges, loan amounts, and so on) for residential genuine estate-related loans in particular geographical areas located reasonably within its functional area ( § 701.31( b)( 3 )). If the credit union has set more stringent terms, conduct a review of loans made in that geographic area to figure out whether the credit union's use of more rigid requirements had a legally enough justification.
7. Determine that the credit union has not set an approximate limitation on loan size and the earnings required before approving a loan.
8. Determine from the loan evaluation whether the credit union makes a disproportionate number of loans under one type of financing (e.g., FHA, VA, other alternative mortgage instruments).
9. Determine the credit union is not utilizing appraisals or the appraisal process to discriminate ( § 701.31( c)). Ensure the cooperative credit union refrains from discounting appraised values, e.g., reducing the evaluated value of a residential or commercial property due to its area or some unfavorable talk about the appraisal form.
10. Review approved and turned down loan applications to guarantee the credit union uniformly applied financial elements consisting of however not restricted to: - Income and financial obligation ratios;
- Credit rating;
- Security residential or commercial property;
- Neighborhood amenities;
- Personal properties.
11. Review the suitable loan records to figure out whether the credit union administers the following without predisposition ( § 701.31): - Loan modifications;
- Loan presumptions;
- Additional collateral requirements;
- Late charges;
- Reinstatement fees;
- Collections.
- Visually figure out whether the cooperative credit union has an Equal Housing Lender Poster notably positioned in all of the cooperative credit union's offices and that all nondiscrimination notifications comply with the requirements of § 701.31(d).
