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Article provided by: ComplianceTech
There are many things in life that require precision in order to be successful. For example, you have to take care to do exact measurements whenever you are baking or the final product will not come out the way that it should. The same goes with things in the business world, including the determination of lending risk. It is important that you take the right steps to fully determine what is needed for a fair lending risk assessment.
Even though you may not get hit with a wave of massive penalties from a financial institution when it comes to lending, there are regulatory agencies that require the financial institutions remain proactive when it comes to ensuring compliance with all of the fair lending requirements that have been put into place. Prior to getting into a full-blown audit for fair lending, it is best that you start off with a comprehensive assessment of lending risk so that you can determine if there are any red flags that may tell you if an audit is required.
Retail Presence/Marketing Strategy
It is important to take a look at growth patterns, lending and deposit strategies, and the manner in which your financial institution takes their approach with the market segment. You need to make sure that you are not stating or using any photos that will convey ethnicity or race in a manner that makes members of a protected class feel as they unwelcome when seeking credit. You should also not be providing any incentives for loan officers to put applicants with high-risk products or any non-traditional products.
Take a look at your position when it comes to external factors like customer base, regulator, and more. You can also look at the date for external sources and previous examination reports for all of the data compiled. A nice resource for this can be found with the Office of the Comptroller for Currency, where you will find a variety of compliance checklists and full rule text.
Always be sure that you review any and all technical requirements that are associated with fair lending when going through lending risk assessment. This should include a sample of the HMDA for your institution for the accuracy of submission, as well as an analysis for the handling of the non-funded applications, and all fair lending disclosures.
Whenever it comes to lending risk assessment and all of the steps that are involved, you can count on ComplianceTech to help. We are available to assist with data-driven solutions for analyzing both fair lending for legal applications as well as regulatory compliance. By working with us, you will have the ability to cut down on risks and simplify the compliance process overall. We can help by quickly creating all of the complex reports that you are looking for filled with rapid HMDA data. This is also a great way for you to get ready for the next CRA or fair lending exam. If you are interested in learning more about all of the ways that we can help you when it comes to fair lending software and all of your compliance needs, simply contact us and we can get started with an assessment.Lending Risk Assessment
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