Created by the U.S. Congress in 1970, the National Cooperative Credit Union Administration is an independent federal agency that insures deposits at federally guaranteed credit unions, secures the members who own cooperative credit union, and charters and regulates federal cooperative credit union.
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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 implemented by the Department of Housing and Urban Development's (HUD) guidelines (24 CFR Part 100), was enacted as Sections 800 to 820 of Title VIII of the Civil Rights Act of 1968, as changed. FHAct makes it illegal for lending institutions to discriminate versus anybody in making offered a residential genuine estate-related transaction or to discourage a candidate from sending a loan application based on race, color, nationwide origin, religious beliefs, sex, familial status, or handicap.
In specific, FHAct uses to funding or buying a mortgage loan protected by property genuine estate. Specifically, a loan provider may not deny a loan or other monetary help for the purpose of purchasing, constructing, improving, repairing, or preserving a home on any of the forbidden bases kept in mind above. FHAct also makes it unlawful for a lending institution to utilize a forbidden basis to discriminate in setting the terms or conditions of credit, such as the loan quantity, interest rate, or period of the loan on a prohibited basis.
Furthermore, a loan provider might not reveal, orally or in composing, a choice based upon any restricted elements or show that it will deal with candidates differently on a forbidden basis, even if the lender did not act on that declaration. An offense might still exist even if a lender dealt with candidates similarly.
In addition, since residential real estate-related transactions consist of any transactions protected by domestic property, FHAct's prohibitions (and regulative requirements in certain areas, such as advertising) apply to home equity lines of credit as well as to home purchase and refinancing loans. These prohibitions also use to the selling, brokering, or appraising of residential genuine residential or commercial property and to secondary mortgage market activities. Consequently, a cooperative credit union's policies, treatments and practices including housing financing should be broadly taken a look at to ensure that the cooperative credit union does not otherwise make not available or reject housing.
Sexual Orientation and Gender Identity
Although FHAct does not expressly prohibit discrimination based on sexual preference or gender identity, HUD addressed gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by issuing the Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule uses to housing assisted or guaranteed by HUD, thus affecting Federal Housing Administration-approved loan providers and others taking part in HUD programs. Specifically, a decision of eligibility for housing that is helped by HUD or subject to a mortgage insured by the Federal Housing Administration shall be made in accordance with the eligibility requirements offered for such program by HUD, and such housing will be made readily available without regard to real or viewed sexual preference, gender identity, or marital status. (24 CFR § § 5.100 and 5.105( a)( 2 )). The Equal Access Rule ended up being 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 found here
For Equal Access to Housing in HUD Programs Regardless of Sexual Orientation and Gender Identity (Equal Access Rule) can be discovered here
NCUA Rules and Regulations 12 CFR § 701.31 can be found here
Definitions utilized in:
- FHAct (42 U.S.C. § 3602) can be found here.
- HUD Regulations (24 CFR § 100.20) can be found 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 negative evaluations or investigations, which might result in public or non-public enforcement actions with substantial fines and/or penalties. Evidence of a "pattern or practice" of discrimination may lead to a recommendation to the U.S. Department of Justice.
Reputational threat can take place when the credit union fails to adhere to the FHAct and specific or class action lawsuits are brought against the cooperative credit union it incurs fines and charges through public enforcement actions or receives unfavorable promotion or declined membership self-confidence as a result of failure to abide by the FHAct.
Examination Objectives
- Determine whether the credit union has actually established policies, procedures, and internal controls to make sure that it remains in compliance with FHAct, its carrying out policy 24 CFR Part 100, and the appropriate NCUA regulation, 12 CFR § 701.31.
- Determine whether the cooperative credit union victimized members of one or more safeguarded classes in any aspect of its residential real estate-related deals.
- Determine whether the credit union remains in compliance with those requirements of the FHAct stated in HUD's executing guideline and the NCUA's relevant guideline.
Exam Procedures
1. Determine whether the board has actually adopted policies, treatments, and basic underwriting requirements worrying nondiscrimination in loaning which officials evaluate nondiscrimination policies, loan underwriting requirements, and associated organization practices routinely. In order to guarantee compliance with the FHAct, the policies, procedures, and requirements must, at a minimum state that the cooperative credit union does not discriminate in property real estate-related deals based upon (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 forbid the workers from making declarations that would discourage the invoice or factor to consider of any application for a loan or other credit service.
3. Conduct interviews of loan officers and other staff members or representatives in the residential financing procedure concerning adherence to and understanding of the credit union's nondiscrimination policies and treatments along with any relevant operating practices.
4. Review any offered information concerning the geographic distribution of the credit union's loan originations with regard to the race and national original portions of the census tracts within its property real-estate financing area.
5. Review turned down mortgage loan applications to identify if the credit union has actually engaged in forbidden practices, including discrimination on the basis of: - The racial composition of a location;
- 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 strict terms (e.g. down payments, interest rates, terms, fees, loan amounts, and so on) for residential real estate-related loans in specific geographical areas located fairly within its functional location ( § 701.31( b)( 3 )). If the credit union has actually set more rigid terms, conduct an evaluation of loans made in that geographical area to determine whether the cooperative credit union's usage of more stringent standards had a legally enough validation.
7. Determine that the cooperative credit union has not set an arbitrary limit on loan size and the earnings required before approving a loan.
8. Determine from the loan evaluation whether the credit union makes a disproportionate variety of loans under one kind of funding (e.g., FHA, VA, other alternative mortgage instruments).
9. Determine the cooperative credit union is not using appraisals or the appraisal process to discriminate ( § 701.31( c)). Ensure the cooperative credit union avoids discounting assessed worths, e.g., lowering the assessed value of a residential or commercial property due to its location or some unfavorable discuss the appraisal type.
10. Review authorized and rejected loan applications to ensure the credit union consistently applied financial elements consisting of however not limited to: - Income and financial obligation ratios;
- Credit history;
- Security residential or commercial property;
- Neighborhood amenities;
- Personal properties.
11. Review the suitable loan records to identify whether the cooperative credit union administers the following without predisposition ( § 701.31): - Loan adjustments;
- Loan assumptions;
- Additional security requirements;
- Late charges;
- Reinstatement costs;
- Collections.
- Visually figure out whether the cooperative credit union has an Equal Housing Lender Poster notably placed in all of the credit union's workplaces which all nondiscrimination notices adhere to the requirements of § 701.31(d).
