Created by the U.S. Congress in 1970, the National Cooperative Credit Union Administration is an independent federal agency that insures deposits at federally insured cooperative credit union, secures the members who own credit unions, and charters and controls federal credit unions.
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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 carried out by the Department of Housing and Urban Development's (HUD) regulations (24 CFR Part 100), was enacted as Sections 800 to 820 of Title VIII of the Civil Liberty Act of 1968, as changed. FHAct makes it unlawful for lending institutions to victimize anyone in making readily available a domestic genuine estate-related deal or to prevent a candidate from submitting a loan application based upon race, color, nationwide origin, religion, sex, familial status, or handicap.

In specific, FHAct applies to financing or buying a mortgage loan protected by property realty. Specifically, a lending institution may not reject a loan or other financial assistance for the purpose of getting, constructing, enhancing, fixing, or maintaining a home on any of the restricted bases noted above. FHAct also makes it unlawful for a lender to use a prohibited basis to discriminate in setting the terms or conditions of credit, such as the loan amount, rate of interest, or period of the loan on a forbidden basis.

Furthermore, a lending institution might not express, orally or in writing, a choice based upon any forbidden aspects or indicate that it will treat applicants in a different way on a restricted basis, even if the lending institution did not act on that declaration. An infraction may still exist even if a lending institution dealt with applicants similarly.

In addition, because residential real estate-related deals consist of any transactions protected by residential realty, FHAct's restrictions (and regulative requirements in specific locations, such as marketing) apply to home equity credit lines as well as to home purchase and refinancing loans. These prohibitions also use to the selling, brokering, or appraising of residential genuine residential or commercial property and to secondary mortgage market activities. Consequently, a credit union's policies, treatments and practices involving housing finance need to be broadly taken a look at to ensure that the credit union does not otherwise make unavailable or deny housing.

Sexual Orientation and Gender Identity

Although FHAct does not specifically forbid discrimination based upon sexual preference or gender identity, HUD resolved gay, lesbian, bisexual, and transgender (LGBT) housing discrimination by issuing the Equal Access to Housing in HUD Programs No Matter Sexual Preference 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, thus affecting Federal Housing Administration-approved lending institutions and others participating in HUD programs. Specifically, a decision of eligibility for housing that is assisted by HUD or subject to a mortgage guaranteed by the Federal Housing Administration will be made in accordance with the eligibility requirements provided for such program by HUD, and such housing shall be provided without regard to real or viewed sexual orientation, gender identity, or marital status. (24 CFR § § 5.100 and 5.105( a)( 2 )). The Equal Access Rule became 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 Regardless of Sexual Preference and Gender Identity (Equal Access Rule) can be discovered here

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

Definitions utilized in:

- FHAct (42 U.S.C. § 3602) can be discovered here.
- HUD Regulations (24 CFR § 100.20) can be discovered 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 found here.
- NCUA Rules and Regulations (12 CFR § 701.31( a)) can be found here

Associated Risks.
Exam Objectives.
Exam Procedures.
Checklist

Associated Risks

Compliance dangers can take place from adverse evaluations or examinations, which could cause public or non-public enforcement actions with considerable fines and/or charges. Evidence of a "pattern or practice" of discrimination may lead to a recommendation to the U.S. Department of Justice.

Reputational risk can occur when the credit union fails to abide by the FHAct and individual or class action suits are brought versus the credit union it incurs fines and penalties through public enforcement actions or receives negative publicity or decreased membership confidence as a result of failure to adhere to the FHAct.

Examination Objectives

- Determine whether the cooperative credit union has actually developed policies, treatments, and internal controls to guarantee that it is in compliance with FHAct, its executing policy 24 CFR Part 100, and the appropriate NCUA regulation, 12 CFR § 701.31.
- Determine whether the credit union victimized members of several safeguarded classes in any element of its residential genuine estate-related deals.
- Determine whether the cooperative credit union is in compliance with those requirements of the FHAct set forth in HUD's implementing policy and the NCUA's appropriate guideline.

Exam Procedures

1. Determine whether the board has actually embraced policies, treatments, and basic underwriting requirements worrying nondiscrimination in loaning and that officials examine nondiscrimination policies, loan underwriting requirements, and related company practices regularly. In order to assure compliance with the FHAct, the policies, procedures, and requirements must, at a minimum state that the cooperative credit union does not discriminate in domestic genuine estate-related deals based on (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 restrict the employees from making declarations that would dissuade the receipt or factor to consider of any application for a loan or other credit service.

3. Conduct interviews of loan officers and other workers or agents in the property lending procedure concerning adherence to and understanding of the cooperative credit union's nondiscrimination policies and treatments along with any pertinent operating practices.

4. Review any available information concerning the geographic distribution of the credit union's loan originations with regard to the race and national initial portions of the census systems within its domestic real-estate lending area.

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

6. Review the cooperative credit union's practices, records, and reports to determine if it sets more strict terms (e.g. deposits, rates of interest, terms, fees, loan quantities, etc) for property real estate-related loans in specific geographic areas located reasonably within its operational area ( § 701.31( b)( 3 )). If the credit union has set more rigid terms, conduct a review of loans made in that geographic area to identify whether the credit union's usage of more rigid standards had a lawfully sufficient validation.
7. Determine that the cooperative credit union has not set an arbitrary limit on loan size and the earnings required before giving a loan.

8. Determine from the loan review whether the credit union makes a disproportionate variety of loans under one kind of funding (e.g., FHA, VA, other alternative mortgage instruments).

9. Determine the cooperative credit union is not utilizing appraisals or the appraisal procedure to discriminate ( § 701.31( c)). Ensure the credit union avoids marking down evaluated worths, e.g., decreasing the appraised value of a residential or commercial property due to its area or some unfavorable discuss the appraisal type.
10. Review authorized and turned down loan applications to guarantee the credit union consistently applied financial aspects including but not restricted to: - Income and financial obligation ratios;
- Credit rating;
- Security residential or commercial property;
- Neighborhood features;
- Personal possessions.

11. Review the proper loan records to identify whether the cooperative credit union administers the following without predisposition ( § 701.31): - Loan modifications;
- Loan assumptions;
- Additional security requirements;
- Late charges;
- Reinstatement charges;
- Collections.
- Visually identify whether the cooperative credit union has an Equal Housing Lender Poster conspicuously put in all of the credit union's offices which all nondiscrimination notices comply with the requirements of § 701.31(d).