FAQs
First, a person alleging injury may sue the creditor in a federal district court. Second, the federal agency with jurisdiction may take action against the creditor. Third, the Justice Department may pursue a civil action against a suspected violator.
What is an example of a fair lending complaint? ›
For example, if a lender refuses to make a mortgage loan because of your race or ethnicity, or if a lender charges excessive fees to refinance your current mortgage loan based on your race or ethnicity, the lender is in violation of the federal Fair Housing Act.
What is a fair lending assessment? ›
According to the FDIC, a risk assessment is “an effort to identify and measure the risk inherent in the bank's lending process and determine what control and monitoring mechanisms are in place to protect against illegal discrimination.” So in summary, your goal should be first look at your inherent risk - the risk ...
What are the three types of fair lending discrimination? ›
Types of Lending Discrimination
Overt evidence of disparate treatment; • Comparative evidence of disparate treatment; and • Evidence of disparate impact.
What happens if an individual willfully violates the provisions of the fair credit? ›
If any person intentionally fails to comply with the requirements of the FCRA, they can be held liable to the affected consumer. The damages may include actual losses incurred by the consumer, punitive damages determined by the court, and the costs and reasonable attorney's fees for successful legal actions.
What are the three major fair lending regulations? ›
What are the Main Fair Lending Laws & Regulations?
- Fair Housing Act. There was an old woman who lived in a shoe. ...
- Equal Credit Opportunities Act. ...
- Home Mortgage Disclosure Act.
Does filing a complaint with CFPB do anything? ›
Consistent with applicable law, we securely share complaints with other state and federal agencies to, among other things, facilitate: supervision activities, enforcement activities, and. monitor the market for consumer financial products and services.
What is an example of overt discrimination in fair lending? ›
Overt Discrimination
For example, an institution may offer some type of loan product that has an age requirement that is inconsistent with the actual legal requirements resulting in discrimination based on age.
What are unfair lending practices called? ›
Predatory lending is any lending practice that uses deceptive or unethical means to convince you to accept a loan under unfair terms or to accept a loan that you don't actually need.
What are the three fair lending risks? ›
A fair lending risk assessment works by evaluating the different types of risks in your institution. In the most general sense, there are three important elements that a fair lending risk assessment will consider: inherent risk, controls, and residual risk.
Other popular tools used by lenders to ensure compliance with fair lending laws are file reviews and statistical procedures (e.g. regression analysis) aimed at identifying disparate treatment of similarly situated protected and non-protected loan applicants.
What is retrospective relief in fair lending? ›
Retrospective injunctive relief may include relief for victims of past discrimination, actual and punitive damages, and offers or adjustments of credit or other forms of loan commitments.
What is an example of disparate treatment in fair lending? ›
It could be a loan officer prioritizing a loan package for a borrower with a surname of Smith over a borrower with a surname of Gonzales. It could be a debt collector using predatory tactics against a female customer while following the rules on collection calls with men because women “are easier to scare into paying”.
What is steering in fair lending? ›
Steering refers to the illegal practice of directing a prospective homebuyer toward — or away from — a particular neighborhood or area based on protected characteristics. These characteristics include race, religion and more.
Which is a potential violation of the Fair Housing Act? ›
Harassment: The Fair Housing Act makes it illegal to harass persons because of race, color, religion, sex (including gender identity and sexual orientation), disability, familial status, or national origin. Among other things, this forbids sexual harassment. Learn more about sexual harassment here.
Which of the following is a potential consequence of violating fair lending requirements? ›
Failure to comply with the Fair Lending requirements may: Failure to comply with the Fair Lending requirements may result in fines and penalties, harm the bank's reputation, and be a violation of the Code of Conduct, which could result in corrective action, up to and including termination of your employment.
What happens if you violate a loan agreement? ›
Consequences of a Breach of Covenant
A penalty or fee charged to the debtor by the creditor; An increase in the interest rate of the bond or loan; An increase in the collateral; Termination of the debt agreement; and.
What happens if you violate the Truth in lending Act? ›
Under TILA, a creditor is considered strictly liable for any violations. This means money damages are imposed for the violations, regardless of the creditor's intent.
What happens if you violate terms of a loan? ›
The agreement dictates new terms and actions to be met. If not navigated well, it can result in financial penalties, a recall of the loan, or even legal action.