Don’t Discriminate Illegally Based on Immigration Status
Written by: Bill Dolan, CMB, AMP
You may recall towards year-end; a major institution was fined for intentionally discriminating against Armenian American credit card applicants. But did you know that the enforcement action against this institution came right after both the CFPB and the DOJ had issued a joint statement warning both banks and credit unions not to use immigration status to illegally discriminate against credit applicants? The CFPB took yet another step by issuing further guidance attributed to AI and adverse action notices by treating applicants differently when using AUS that can lead to discrimination based on prohibited characteristics.
To assist financial institutions with this, the CFPB released a “Language Access Plan” to not only reaffirm their commitment in providing the necessary programs, tools, and services to limited English Proficiency consumers, but also went a step further by supporting these resources such as the Language Access Task Force and internal translation and audit processes.
As for the case of the institution fined by the CFPB, the enforcement action was brought due to the bank scrutinizing, negatively assessing, and often denying certain types of individuals because of the bank’s concern regarding fraud. The conclusion was clear. The institution did not have a nondiscriminatory explanation for denying credit and lied to the applicants as to the reason that they had been denied.
Whether you are offering credit to your borrowers in residential mortgage, consumer, or commercial lending, ask yourself if your Compliance Management System (CMS) ensures that you maintain proper and accurate policies, procedures, and guidelines when it comes to Equal Credit Opportunity Act (ECOA) and Reg B?
If you believe you need help and support in these or other areas when it comes to compliance and risk management or that you may require detailed explanations and interpretations of these and other regulations and might be unsure as to what your next steps should be, then pick up the phone or email Spillane Consulting Associates today.
SCA’s team of expert compliance and risk management consultants have established themselves as the clear “GO TO” leaders in our industry today.
For more information in just how SCA can help you and your institution with the solutions needed to meet the lending challenges of today, contact Bill Dolan, Director, at (617) 694-2617 or by email at: Wdolan@scapartnering.com.
