Department Of Justice Fair Lending Enforcement - LBA
Department of Justice Fair Lending Enforcement LBA Bank Counsel Conference December 14, 2012
DOJ Fair Lending Enforcement In the next 15 minutes you can learn about: 1. The types of fair lending cases DOJ recently has filed 2. A bank-related disability discrimination settlement agreement 3. Some steps your clients can take to improve civil rights compliance
DOJ Fair Lending Basics Primary Statutes Fair Housing Act Equal Credit Opportunity Act Servicemembers Civil Relief Act Sources of Cases Referrals Complaints DOJ-initiated matters
DOJ Fair Lending Basics Types of Credit mortgage and other housing-related auto credit cards and other consumer loans small business DOJ Jurisdiction Extends to All Creditors
DOJ Fair Lending Basics Coordination with bank regulators & CFPB all 7 discrimination cases resulted from bank agency referrals extensive coordination on SCRA issues regular interagency meetings Working with U.S. Attorneys’ Offices Countrywide, Wells Fargo, GFI
Lending Discrimination 7 lending discrimination cases settled since October 1, 2011 6 include both ECOA & Fair Housing Act claim 5 address race & national origin discrimination more than 550,000,000 in monetary relief compensation for 250,000 victims
The Discrimination Cases United States v. Countrywide Financial Corporation (C.D. Cal.) United States v. Wells Fargo Bank, NA (D.D.C.) United States v. SunTrust Mortgage, Inc. (E.D. Va.) United States v. GFI Mortgage Bankers, Inc. (S.D.N.Y.) United States v. Luther Burbank Savings (C.D. Cal.) United States v. Bank of America N.A. (W.D.N.C.) United States v. Mortgage Guaranty Insurance Corp. (W.D. Pa.)
Discrimination Issues Addressed Steering Countrywide, Wells Fargo Pricing Countrywide, Wells Fargo, GFI, SunTrust Underwriting maternity leave: MGIC (mortgage insurance) disability income: Bank of America minimum loan amount: Luther Burbank
Fair Lending Compliance Review how pricing & underwriting written guidelines and informal practices impact specific groups (e.g., race, national origin, sex, disability) Monitor pricing & underwriting exceptions closely Investigate complaints (MGIC & Bank of America arose from individual complaints)
SCRA Enforcement 6 SCRA lending settlements since October 1, 2011 Global mortgage servicing settlements with 5 largest servicers protect servicemembers in vast majority of all mortgages Cap One settlement provides first enterprise-wide SCRA review & 12 million monetary relief
The SCRA Settlements Global mortgage servicing settlement (D.D.C.) : Bank of America Corporation Citigroup, Inc. JP Morgan Chase & Co. Ally Financial (formerly GMAC) Wells Fargo Bank, NA United States v. Capital One Financial Corp (E.D. Va.)
SCRA Issues Addressed Foreclosures no non-judicial foreclosures judicial foreclosures require proper affidavit Victims receive 125,000 plus lost equity Pricing 6% interest rate on mortgages 6% interest rate on credit cards, auto loans and other types of accounts Improper default judgments or repossessions
SCRA Compliance Read the US v. Capital One consent order Comprehensively addresses SCRA lending issues Develop, Implement and Train Employees on SCRA Procedures Fully Investigate Individual Complaints Capital One arose from an individual complaint
Other Disability Discrimination Issues Title III of the ADA -- Public Accommodations Wells Fargo Settlement Agreement (May 2011) Addresses failure to communicate effectively with people with disabilities (not just in lending) Refusal to accept relay calls Provides damages & injunctive relief Available at http://www.ada.gov/wells fargo/wells fargo settle.htm
Disability Discrimination Compliance Read the Wells Fargo settlement agreement Addresses several disability communication issues Develop, Implement and Train Employees on ADA Procedures Fully Investigate Individual Complaints Wells Fargo arose from an individual complaint
Want to know more? All lending discrimination & SCRA complaints and settlements are on the HCE website http://www.justice.gov/crt/about/hce/caselist.php
Contact Information Donna M. Murphy Principal Deputy Chief Housing and Civil Enforcement Section Civil Rights Division U.S. Department of Justice donna.murphy@usdoj.gov
Fair Lending Enforcement LBA Bank Counsel Conference December 14, 2012 . DOJ Fair Lending Enforcement In the next 15 minutes you can learn about: 1. The types of fair lending cases DOJ recently has filed 2. A bank-related disability discrimination settlement agreement 3. .
Fair lending guarantees the same lending opportunities to everyone. Is there a law that protects my fair lending rights? Yes. The federal Fair Housing Act protects your fair lending. rights. The Oice of Fair Housing and Equal Opportunity. enforces the federal Fair Housing Act and state and local enforcement agencies enforce fair housing laws .
Training Outline Reintroduction to Fair Lending Debunking the Eight Common Fair Lending Myths: -"Our written policies and procedures have us covered." -"Fair Lending is really about the underwriting process." -"Our bankers fully understand fair lending compliance." -"We don't have diversity in our market area."
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