With respect to fair lending scrutiny, redlining remains a critical concern for financial institutions. While data analysis is essential, a comprehensive understanding of redlining risk requires banks to look beyond the numbers. “Telling your bank’s story” involves proactively assessing policies, practices, and community context to ensure effective management of fair lending risk. Redlining, a form […]
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In today’s complex regulatory environment, financial institutions face increasing scrutiny and risk. This is especially true in areas like fair lending. To navigate this successfully, it is crucial to adopt a data-driven approach, combined with strong collaborative relationships. This post explores key strategies for mitigating risk based a collaborative approach. The Power of Understanding The […]
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Risk exists when there is potential for harm coupled with uncertainty of outcomes. The fair lending environment for lenders contains both. The approach to risk mitigation should be one of reducing uncertainty. Below we provide a four-step strategy that can be used to reduce uncertainty and, therefore, mitigate fair lending risk. Step 1: Know Your […]
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Summary The conversation discusses the recent article from the CFPB on their enforcement work in 2023 and what lies ahead. The main themes include the emphasis on enforcement and the use of technology by the CFPB, the potential game-changing impact of technology in data analysis, and the importance of third-party support in analyzing data. The […]
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While technological advances have increased efficiency and, in some ways, made things easier, these advances have also increased the speed at which things move and created more demands. One of these demands is the need to analyze ever-increasing quantities of data. This data contains potential risks and potential rewards for financial institutions. It contains risks […]
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The upcoming reporting of small business lending under the 1071 section of the Dodd-Frank Act imposes additional compliance and fair lending burdens on banks and other lending institutions. The compliance aspects include data collection, reporting, and complying with the requirements; and the fair lending implications include the impact of these data with respect to fair […]
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The preliminary 2022 HMDA data recently released by the CFPB is the first glimpse into aggregate lending distributions geographically based on the new 2020 Decennial Census data. Lenders were required last year to begin reporting census tracts based on the new Census. This is the first public release of this lending data for 2022. From […]
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The regulatory world in which financial companies operate is a vast sea of uncertainty that is seemingly in a constant state of churn. Although the laws and regulations themselves are not necessarily constantly changing, regulatory interpretation and shifting priorities, coupled with bifurcated and shifting agendas, create a sort of organized chaos. This makes compliance difficult, […]
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In recent posts, we have focused on redlining as one of the more prominent fair lending risks that institutions are facing today. The agencies have clearly made redlining a top priority, and recent fair lending enforcement actions have confirmed this. There is, however, more to the fair lending risk management story. The Many Facets of […]
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As lenders face increasing scrutiny from the regulatory and enforcement agencies with regard to fair lending in general, and redlining in particular, institutions are searching for ways to mitigate these risks. Why Correcting a Problem is So Hard Fair lending risk management now demands a data-centered strategy, as the focal point of a redlining examination, […]
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