Marketing in general is tough, but when you combine marketing with Fair Lending compliance, it gets even tougher. If you’ve been reading my work for a period of time, you know I love checklists. This is one to use when positioning your marketing campaigns, to ensure that your marketing is in line with Fair Lending standards.
Review The Marketing Pieces Like an Examiner:
_____Is there anything in the marketing piece such as photos or code words that would convey racial or ethnic limitations? For instance, are you passing out a marketing piece with the happy white family and a suburban home in the background, to an inner city area with a large population of minority clients? This could be an example of racial and ethnic limitations in marketing, because those receiving the ad may not relate to it depending on the demographics in that part of the city. It may seem likely to the recipient, that those are the only types of people you lend to and the types of homes that you lend on, versus a more diverse family with a background of a home that is more common to their area.
______Would a reasonable person looking at the marketing piece regard the message as indicating minority consumers are less desirable? Once again, take a look at the images on your marketing pieces.
_____Are you marketing through media that distributes your message to a diverse population? In this example, a billboard on a major highway pretty much gets seen by anyone driving in that area, no matter where they live in the area. Or, a TV commercial on a locally syndicated channel like ABC, CBS or NBC is likely to reach a diverse population. Be sure to check out the market demographics of the conduit to ensure you are reaching a diverse market.
_____Does your marketing differ in minority vs. non-minority areas of your market? I’m not talking about images with this one. Instead, if your marketing is abundant in mainly well-served areas but shows very little effort in under-served areas, this could be problematic. You marketing needs to be well balanced in all parts of your assessment area.
_____Are lead acquisitions purchased that exclude market segments? This issue is a big one for lenders as they generally set buyer credit criteria way above the programs that they offer. This may result in excluding certain market segments in the lender’s assessment area. Be especially careful if you are letting your loan originators make the buying decisions on your lead criteria, as they may not be aware of the problems this can cause.
_____Are MSA agreements only with offices in well-served populations versus under-served populations? If you are still doing MSA agreements, then you should look at the racial distributions of the areas where you have an MSA agreement in place. Remember, this is a Marketing Services Agreement and as such is a Marketing initiative. Are these agreements mainly in places that are well-served, or do you also have MSA agreements in place in under-served areas?
_____If you use pre-screened solicitation, what are the metrics and do they exclude segments within your assessment area?
_____Does the marketing piece offer less advantageous products to one community of consumers versus another? Don’t make assumptions like you should only offer first time homebuyer programs to under-served areas and jumbo loans to well-served areas.
_____Do your marketing pieces contain all of the required disclosures by State and Federal Law?
_____Does your marketing contain any of the Truth in Lending/Reg. Z trigger terms that would require more disclosures? If you are not sure, here is the link to that part of the regulation. http://www.consumerfinance.gov/eregulations/diff/1026-24/2013-24521/2013-28210?from_version=2013-28210#1026-24-a
Done well, your marketing can bring in an abundance of business in all parts of your assessment area. This is the true sign of lenders who are doing the best that they can, to offer fair and equitable access to credit.
