WASHINGTON (9/5/08)—Overt discrimination in lending practices rarely occurs any more, but lenders need to be aware that some subtle procedures could add up to unintentional unfair practices, writes Valerie Moss in the September issue of The Credit Union National Association’s (CUNA’s) Credit Union Magazine
. Moss, CUNA’s director of compliance information, suggests credit unions consider these examples:
* A program that’s designed to serve all members but unintentionally discriminates against the elderly. This program would violate fair lending unless the credit union could show a business need for the policy or practice; * A rogue employee who ignores the credit union’s fair lending policies and procedures. The credit union would be held liable for the unchecked discriminatory behavior of one of its employees; or * A marketing campaign that targets only consumers in affluent suburbs, while ignoring predominantly minority neighborhoods in the inner city. Fair lending laws cover every aspect of the lending process, including the credit union’s advertising campaigns.
The article, “Fair Lending Lifeline,” advises credit unions that examiners expect credit unions to have solid policies in place to serve their entire memberships equitably. The National Credit Union Administration’s (NCUA) will continue its ongoing focus on fair lending issues next year. To read fair-lending examination pointers and credit union fair-lending insights, use the resource link below to access the magazine article.