Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that guarantees deposits at federally insured cooperative credit union, protects the members who own credit unions, and charters and regulates federal cooperative credit union.
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4. > Federal Consumer Financial Protection Guide
5. > Compliance Management

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Fair Housing Act (FHA)

Federal Consumer Financial Protection Guide

Compliance ManagementCompliance Management Systems and Compliance Risk


Consumer Leasing Act (Regulation M).

Fair Credit Reporting Act (Regulation V).

Homeowners Protection Act (PMI Cancellation Act).

Military Lending Act (MLA).

Real Estate Settlement Procedures Act (Regulation X).

Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) (Regulation G).

Servicemembers Civil Relief Act (SCRA).

Small Dollar Lending and Payday Alternative Loans.

Truth in Lending Act (Regulation Z).


Equal Credit Opportunity Act (Regulation B).

Fair Housing Act (FHA).

Home Mortgage Disclosure Act (Regulation C).


Electronic Fund Transfer Act (Regulation E).

Expedited Funds Availability Act (Regulation CC).

Truth in Savings Act (NCUA Rules & Regulations Part 707).


Children's Online Privacy Protection Act.

Privacy of Consumer Financial Information (Regulation P).

Unfair, Deceptive, or Abusive Acts or Practices (UDAAP).

Electronic Signatures in Global and National Commerce Act (E-Sign Act).

Fair Housing Act (FHAct, 42 U.S.C. § 3601 et seq.), which is executed by the Department of Housing and Urban Development's (HUD) policies (24 CFR Part 100), was enacted as Sections 800 to 820 of Title VIII of the Civil Rights Act of 1968, as amended. FHAct makes it illegal for lending institutions to discriminate against anyone in offering a property real estate-related deal or to prevent a candidate from submitting a loan application based on race, color, national origin, faith, sex, familial status, or handicap.

In specific, FHAct applies to funding or acquiring a mortgage loan secured by property realty. Specifically, a lending institution might not reject a loan or other monetary support for the purpose of buying, constructing, improving, fixing, or maintaining a house on any of the prohibited bases kept in mind above. FHAct also makes it unlawful for a lender to utilize a restricted basis to discriminate in setting the terms or conditions of credit, such as the loan amount, interest rate, or duration of the loan on a forbidden basis.

Furthermore, a lending institution may not reveal, orally or in writing, a choice based on any restricted factors or suggest that it will deal with applicants differently on a prohibited basis, even if the lending institution did not act on that statement. A violation might still exist even if a lender dealt with applicants similarly.

In addition, since property real estate-related deals include any transactions secured by residential property, FHAct's prohibitions (and regulatory requirements in certain locations, such as advertising) use to home equity lines of credit along with to home purchase and refinancing loans. These prohibitions also use to the selling, brokering, or appraising of domestic real residential or commercial property and to secondary mortgage market activities. Consequently, a credit union's policies, treatments and practices including housing financing should be broadly analyzed to make sure that the cooperative credit union does not otherwise make not available or reject housing.

Sexual Preference and Gender Identity

Although FHAct does not expressly prohibit discrimination based upon sexual preference or gender identity, HUD addressed gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by releasing the Equal Access to Housing in HUD Programs No Matter Sexual Orientation or Gender Identity Rule (Equal Access Rule, 77 Fed. Reg. 5662, Feb. 3, 2012). The Equal Access Rule applies to housing assisted or guaranteed by HUD, thereby impacting Federal Housing Administration-approved loan providers and others taking part in HUD programs. Specifically, a determination of eligibility for housing that is assisted by HUD or subject to a mortgage insured by the Federal Housing Administration shall be made in accordance with the eligibility requirements attended to such program by HUD, and such housing shall be provided without regard to real or perceived sexual preference, gender identity, or marital status. (24 CFR § § 5.100 and 5.105( a)( 2 )). The Equal Access Rule ended up being effective on March 5, 2012.

Fair Housing Act (FHAct, 42 U.S.C. § 3601) can be discovered here

HUD's Regulations (24 CFR Part 100) can be discovered here

For Equal Access to Housing in HUD Programs Despite Sexual Preference and Gender Identity (Equal Access Rule) can be discovered here

NCUA Rules and Regulations 12 CFR § 701.31 can be found here

Definitions used in:

- FHAct (42 U.S.C. § 3602) can be discovered here.
- HUD Regulations (24 CFR § 100.20) can be found here.
- Subpart A - Generally Applicable Definitions and Requirements; Waivers (24 CFR § 5.100) can be discovered here.
- Subpart G - Discriminatory Effect of HUD Regulations (24 CFR § 100.500) can be discovered here.
- NCUA Rules and Regulations (12 CFR § 701.31( a)) can be found here

Associated Risks.
Exam Objectives.
Exam Procedures.
Checklist

Associated Risks

Compliance threats can happen from negative examinations or investigations, which could cause public or non-public enforcement actions with significant fines and/or penalties. Evidence of a "pattern or practice" of discrimination might result in a referral to the U.S. Department of Justice.

Reputational danger can take place when the credit union stops working to adhere to the FHAct and individual or class action suits are brought versus the cooperative credit union it incurs fines and charges through public enforcement actions or gets unfavorable promotion or decreased membership self-confidence as an outcome of failure to adhere to the FHAct.

Examination Objectives

- Determine whether the cooperative credit union has established policies, treatments, and internal controls to guarantee that it is in compliance with FHAct, its carrying out guideline 24 CFR Part 100, and the relevant NCUA policy, 12 CFR § 701.31.
- Determine whether the credit union discriminated versus members of one or more secured classes in any element of its property real estate-related transactions.
- Determine whether the credit union remains in compliance with those requirements of the FHAct set forth in HUD's implementing guideline and the NCUA's appropriate guideline.

Exam Procedures

1. Determine whether the board has actually embraced policies, treatments, and basic underwriting requirements concerning nondiscrimination in financing which officials evaluate nondiscrimination policies, loan underwriting standards, and associated organization practices regularly. In order to ensure compliance with the FHAct, the policies, procedures, and requirements must, at a minimum state that the credit union does not discriminate in domestic real estate-related deals based upon (12 CFR § 701.31( b), 24 CFR § 100.50( b), 24 CFR § 5.100): - Race;.
- Color;.
- National origin;.
- Religion;.
- Sex;.
- Familial status; and,.
- Handicap.

2. Determine that the cooperative credit union has policies that prohibit the staff members from making statements that would dissuade the receipt or consideration of any application for a loan or other credit service.

3. Conduct interviews of loan officers and other staff members or agents in the property financing procedure concerning adherence to and understanding of the cooperative credit union's nondiscrimination policies and procedures as well as any appropriate operating practices.

4. Review any offered information relating to the geographic distribution of the cooperative credit union's loan originations with respect to the race and nationwide original portions of the census tracts within its property real-estate loaning location.

5. Review rejected mortgage loan applications to figure out if the credit union has actually engaged in prohibited practices, consisting of discrimination on the basis of: - The racial structure of a location;
- The earnings level of an area; or
- The language of a candidate( s).

6. Review the cooperative credit union's practices, records, and reports to determine if it sets more rigid terms (e.g. deposits, rates of interest, terms, charges, loan quantities, etc) for domestic genuine estate-related loans in certain geographic locations located reasonably within its functional area ( § 701.31( b)( 3 )). If the cooperative credit union has actually set more rigid terms, conduct an evaluation of loans made in that geographical area to figure out whether the cooperative credit union's usage of more stringent standards had a lawfully sufficient validation.
7. Determine that the cooperative credit union has not set an approximate limitation on loan size and the earnings required before granting a loan.

8. Determine from the loan evaluation whether the credit union makes an out of proportion number of loans under one type of financing (e.g., FHA, VA, other alternative mortgage instruments).

9. Determine the credit union is not utilizing appraisals or the appraisal procedure to discriminate ( § 701.31( c)). Ensure the cooperative credit union refrains from marking down appraised worths, e.g., decreasing the appraised worth of a residential or commercial property due to its location or some negative talk about the appraisal type.
10. Review authorized and turned down loan applications to guarantee the cooperative credit union evenly used financial factors including but not restricted to: - Income and debt ratios;
- Credit history;
- Security residential or commercial property;
- Neighborhood features;
- Personal assets.

11. Review the proper loan records to figure out whether the cooperative credit union administers the following without predisposition ( § 701.31): - Loan adjustments;
- Loan presumptions;
- Additional collateral requirements;
- Late charges;
- Reinstatement costs;
- Collections.
- Visually determine whether the cooperative credit union has an Equal Housing Lender Poster notably placed in all of the credit union's offices and that all nondiscrimination notices adhere to the requirements of § 701.31(d).