Fair Lending Risk - Overt Evidence of Disparate Treatment

Adam Witmer
Fair Lending

Overt evidence of disparate treatment is the first type of discrimination recognized by the courts and probably the easiest one to identify in an organization.  This type of discrimination is defined as when a lender openly discriminates on a prohibited basis.  This means that a lender publicly makes a statement or publishes an advertisement that is a blatant statement of discrimination.  A simple example of this would be if...

Assessing Fair Lending Risk

Adam Witmer
Fair Lending, Compliance Management

Fair lending is one of the hottest topics in regulatory compliance.  As the dust has settled from TRID and the examiners haven’t quite focused their full efforts on the new HMDA rules, fair lending scrutiny is as intense as it ever has been.  In fact, it always has been a hot topic and will always be one.  One trend new trend that I have been seeing, however, is a demand for community banks and credit unions to conduct a fair lending risk assessment.  

CFPB Request on Supervision Process

Adam Witmer
Regulatory Update

On February 14, 2018, the CFPB issued a request for information on their supervision process.  In a statement, the CFBP stated that they are seeking comments and information from interested parties to assist in assessing the overall efficiency and effectiveness of its supervision program and whether any changes to the program would be appropriate.  This is the fourth such requests by...

TRID Product Type for Construction Loans

Adam Witmer
Regulation Z, TRID

Construction loans have proven to be anything but simple under TRID.  The CFPB gave very limited guidance for construction loans first came out and much of the guidance they have provided isn’t as clear as it should be.  For this reason, many financial institutions still seem to struggle with TRID disclosures for construction loans.  For example, disclosing the correct “Product” for a construction loans can

TRID Purpose on Construction Loans

Adam Witmer
TRID, Regulation Z

Construction loans under TRID have proven to be very challenging for many community banks and credit unions.  The reason for this is twofold: the CFPB did not provide much guidance in regards to construction loans and the guidance that they did provide is often found to be confusing.  For this reason, it is worth revisiting the TRID rules for construction loans every once in a while.  I recently received a question regarding the purpose field on the Loan Estimate (LE) as well as the Closing Disclosure (CD) for single-close, two phase construction loan where the land was

FinCEN Updates SAR Form

Adam Witmer
BSA, Regulatory Update

FinCEN recently announced that they will be revising the Suspicious Activity Report.  The new version of the SAR will be available in June of 2018 and will include several changes.  FinCEN is currently in the process of developing and testing the updated SAR and has released some mock-ups of the proposed SAR, though they say that the final SAR may be slightly different.  This is the first round of updates to the SAR form since releasing the new electronic version of the form a few years back.  While we saw changes to the...

Credit Score Exception Notice for Denied Applications

Adam Witmer
FCRA

In discussing the Fair Credit Reporting Act, one question I often receive is whether or not the credit score exception notice must be provided when an application is denied and the applicant is receiving an adverse action notice.  The thought is that the credit score information is included on the adverse action notice, so why would the credit score exception notice - that basically provides the exact same information - still be required? Believe it or not, this question is actually quit complex, so I will do my best to explain this for you.  

SAR Filing Deadline

Adam Witmer
BSA

As a financial institution, SAR reporting is a critical function that can result in violations being cited in an exam report.  Because of this, it is extremely important to fully understand the reporting rules, of which there are quite a few.  One of those rules relates to the timeframe for SAR reporting - i.e., how long a financial institution has to file SAR.

Board Reporting SAR on Director

Adam Witmer
BSA

Several years ago, I had just arrived on-site for a bank visit when the BSA Officer quickly pulled me into her office and shut the door.  She had a dilemma: she had filed a SAR on a director and was faced with the challenge of how she was going to report that SAR to her board.  Her challenge was that the board had a practice of viewing a copy of the entire completed SAR and if she continued on with this practice, should be be disclosing to the director that the bank had filed a SAR on him.  This, of course, would be problematic for a number of reasons: unlawful disclosure and a very uncomfortable boardroom are two of them.  Fortunately for this BSA Officer, I had a simple solution for her.

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