The term “Fintech” has come to mean essentially any application of technology for delivering financial services. More specifically, the term represents a rapidly growing space of alternative lending facilities that are outside of the traditional banking industry. This includes both consumer and, more recently, business lending.
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For the last decade the regulatory and enforcement agencies have been increasingly using statistical methods such as regression to evaluate fair lending compliance. With the passage of Dodd-Frank and the new emphasis on modeling and quantification, there has been a fervor to apply econometric techniques to a wide array of issues in the financial industry. […]
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An inter-agency webinar featuring “hot topics” was conducted Thursday, November 16th and included officials from the CFPB, Federal Reserve, FDIC, HUD, NCUA, OCC, and the Department of Justice. The webinar covered issues related to the new HMDA data and fair lending. Although there was nothing covered that was entirely new with regard to fair lending, […]
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Analysis of loan data indicates weakness in your institution’s lending activity in low-to-moderate income (LMI) and minority-majority geographies – now what?
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Most community banks have some type of program or programs in which they attempt to cater to the more affluent market. Since the number of people fitting this category is somewhat limited, many banks have instituted or are attempting to institute efforts to gain market share among this segment of potential bank customers.
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There is a great deal of discussion concerning the practice of conducting fair lending analyses of non-HMDA reportable lending using proxy methods. Recall that when analyzing such data, there is no information pertaining to the race, ethnicity, or gender of the applicant. Instead, we use a proxy, a variable that is correlated with, but not equal […]
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The FFIEC announced last week that 2016 Home Mortgage Disclosure Act (HMDA) data for reporting institutions is now publicly available for calendar year 2016. Enacted in 1975, the Home Mortgage Disclosure Act requires lenders to report mortgage applications received during the prior calendar year.
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Understanding and managing exceptions to loan policy is a critical component of a financial institution’s fair lending risk management. It is important to understand how exceptions are defined and how they are tracked and managed. In today’s post, we focus on the former and will discuss options for management in the future.
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As we have noted previously, banks across the board are performing better in regard to earnings. This is in part due to an improving economy and consumer confidence, but also to the rising rate environment. Although rates are still at historic lows, prime is one percentage point above the 10 year low of 3.25 and […]
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One of the challenges in analyzing consumer data for fair lending is the lack of protected-class status, such as race, gender and ethnicity. There are solutions for approximating this data, but they offer their own challenges in turn.
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