Yesterday I talked about the basic thoughts behind a good compliance management system. Today we start to roll up our sleeves up and begin to tackle this beast!!
The next step in developing your workflow is to break down the “trigger” areas of Fair Lending and define how each of these areas could cause an issue.
1. Pricing Disparity:
Similar borrowers receive different interest rate/closing costs.
2. Pricing Exceptions:
Pricing Discretion offered to some clients but not applied to others.
3. Underwriting Disparity:
Pre-conceived opinions or bias based on file characteristics.
4. Underwriting Exceptions:
Bending the rules for some clients and not other similar clients.
5. Marketing Disparity and UDAAP Violations:
Do you achieve market parity through your campaigns and archive this information?
Staying away from certain pockets of your market area whether intentionally or unintentionally.
Giving a client a loan or program that is in your best interest and not the client’s best interest.
8. Disparate Impact:
Intentionally or unintentionally excluding a segment of your market when there are less discriminatory alternatives.
9. Data Integrity:
Incorrect data in LOS, pricing engine, HMDA report, etc. that cause file data not to agree.
10. Client Interaction & Client Parity:
All humans have pre-conceived notions and judgments whether consciously or subconsciously that cause them to react negatively to some aspect of another human.
Tomorrow I am taking this one step further by helping you organize these regulations for each position. From there we will start to build out the workflows and monitoring solutions. Stay tuned!!