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Wisconsin Credit Union Foundation

Fair Lending Examinations: Increased Scrutiny, New Methodologies & False Positives

This webinar will help you prepare for your next fair lending exam and include suggestions on how to defend against disparate impact and discrimination claims.

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Type of Event
On Demand Webinar

Who Should Attend
  • Lending
  • Live Webinars
  • On-Demand Webinars
  • Compliance

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Description

The law has long permitted the use of disparate impact analysis to prove discrimination, which means that your credit union can be found liable for discrimination even if there was no intent to discriminate. Credit unions have recently reported that regulators are using statistical analysis and unpublished analytical formulas during fair lending exams, with a new focus on unsecured and vehicle loans, in addition to home loans. The problem is that using these new methodologies and analytical formulas has resulted in “false positive” findings of discrimination.

The NCUA Fair Lending Guide provides:

Congress intended an ‘effects test’ concept to apply to a credit union’s determination of creditworthiness. The effects test refers to a credit practice that appears facially neutral, but has a disproportionately negative effect on a prohibited basis, even though the credit union has no intent to discriminate. This type of practice is discriminatory, in effect, unless the credit union can demonstrate the practice meets a legitimate business need that cannot be reasonably achieved by means less disparate in impact.

The new concern is that regulators can establish disparate impact (i.e., discrimination) based solely on statistics and unpublished analytical formulas. This webinar will help you prepare for your next fair lending exam and include suggestions on how to defend against disparate impact and discrimination claims.

Learning Objectives

  • Overview of the fair lending laws and your institution’s obligations
  • Risks of noncompliance
  • Difference between discrimination and disparate impact
  • Restrictions on obtaining a spouse’s signature on loan documents and situations when a spouse’s signature is permitted
  • Defending against red-lining claims

Speaker

Elizabeth Fast, Spencer Fane LLP

Investment

$259.00