Debbie K Hoffman, Chief Legal Office, Digital Risk; recently featured in Secondary Marketing Executive Magazine in her article titled “Equal Lending or Fair Lending” co-authored along with Rick Roque discussing the impact of Fair Lending violations subjecting the institution to regulatory penalties , operational and technical changes.
Earlier, lenders would engage in lending practices, knowingly or unknowingly, which were predatory in nature and thus, steered borrowers to higher-paying loans. In a lot of cases, lenders violated the fair lending law unaware, which was primarily due to a lack of clear guidance, a true misunderstanding of the law, lack of technology or processes to detect unacceptable variances, or a lender’s lack of focus.
However, lenders are now focusing on the implementation of the CFPB’s new HMDA rule requiring expanded reporting and disclosure of data, which will become effective as of Jan. 1, 2018. Due to the transparency of the reporting and information available, the question is if lenders will face an increased risk of fair lending litigation – whether directly from regulatory agencies or from consumers. Also public disclosure of the expanded data will increase cyber security concerns as well as both individual and potential class action suits may arise.
Debbie Hoffman goes on to discuss the two lawsuits brought forth by The City of Miami alleging violation of the Fair Housing Act against Wells Fargo and Bank of America. Read the full article in detail here http://issues.secondarymarketingexec.com/article/equal-lending-or-fair-lending/