Commercial Lenders: Fair Lending Hot Spots
It’s no secret that the regulatory compliance requirements for commercial loans are far less than that of consumer loans. This sometimes gives commercial lenders the perception that “rules” don’t apply to them. In reality, while the regulations may be few, the ones that do apply to commercial lending often have a much higher level of risk. For example, flood insurance, fair lending and the upcoming Section 1071 requirements are just a few.
Fair Lending is a big deal, and you need to ensure all your lenders, both consumer and commercial, avoid illegal discrimination in any form. Illegal discrimination doesn’t have to be intentional to get your institution into hot water. Seemingly innocent practices can sometimes have unintended consequences. A common area where issues can arise is lender discretion in setting loan pricing. Keep in mind, discretion is not wrong, but you are going to want to have some controls in place to manage the potential risk.
Kevin explains more in the video.
Kevin Edwards
Kevin brings years of experience and a unique perspective on regulatory matters to our clients. A self-proclaimed geek and accredited CRCM, Kevin is also a recovering attorney with experience as in-house counsel for a large regional bank and one of the leading national title insurance providers. For reasons unknown, Kevin decided to leave the safety and serenity of his desk job to seek fortune and glory as a wandering adventurer. Like a bank compliance version of Kwai Chang Caine, The Man with No Name or Don Quixote, he now travels the land seeking to help those in need and righting compliance wrongs, wherever he may find them. Kevin lives in Sioux Falls with his two children, who are surprisingly normal after having endured their father’s vivid imagination for their entire lives. He won’t admit to having any hobbies, because apparently “Regulations never sleep.” (While he does say this in his Batman voice, we’re pretty sure he’s joking.) From the looks of his Facebook page, he likes the outdoors and spending time with his large extended family (who seem like relatively normal people).