Topic: Fair Housing Act (FHA)
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In August 2022, the FDIC amended its Equal Housing Lender poster to reflect that the former Consumer Response Center had been renamed as the National Center for Consumer and Depositor Assistance. However, Regulation B’s adverse action notice information still references the Consumer Response Center. Should we continue to refer to the Consumer Response Center in adverse action notices? Also, does the Equal Housing Lender poster no longer have an image of a house at the top of the page?
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We recommend referencing the “Division of Depositor and Consumer Protection, National Center for Consumer and Depositor Assistance, Federal Deposit Insurance Corporation” on adverse action notices. The CFPB just today released a final rule amending Appendix A to Regulation B to change the contact information for the FDIC required in adverse action notices from “FDIC Consumer…
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A private group is developing a subdivision and has been unable to sell the new homes. The group wants to partner with us to offer incentives to promote more sales in the subdivision. Our bank wants to offer special terms to the first four customers who buy one of the new homes in the developer’s subdivision — such as balloon loans that would be interest-free for the first three years of the loan term. Would there be any fair lending issues associated with offering these loan incentives only to customers who want to buy homes in this subdivision?
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Yes, we believe there may be fair lending issues associated with offering favorable loan terms only to customers who buy one of the developer’s new homes, since the basis for qualifying for the incentive would be the geographic location of the property securing the loan. It appears that this incentive would violate the Illinois Fairness…
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Can you recommend any resources or guidance on using customer data for targeted marketing purposes? We have been using zip codes for targeted marketing promotions. Are there any limitations on data targeting that we should be aware of?
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Yes, when considering targeted marketing campaigns, you should consider whether any fair lending laws or UDAAP concerns will be triggered. We recommend carefully considering whether any targeted marketing campaign may be viewed as discriminatory or having a disparate impact on a protected class and thoroughly documenting your business reasons for engaging in such a campaign.…
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What disclosures are we required to make available on our bank’s website?
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Below is a non-exhaustive list of the disclosures and notices that you may choose to post or may be required to post on your bank’s website. This list may be incomplete depending on the products and services you offer or advertise on your website, some of which may trigger additional disclosure requirements. Privacy Notices The…
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Our loan department would like to send letters to customers with first mortgages with our bank encouraging them to apply for a HELOC. Will these letters require an “Equal Housing Lender” symbol or language?
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Yes, the Fair Housing Act requires that any advertisement for a loan secured by a dwelling must include a statement that the lender is an “Equal Housing Lender.” Consequently, the “Equal Housing Lender” logo should be included in your loan department’s HELOC letters. For resources related to our guidance, please see: OCC Fair Housing Regulations,…
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We distribute a fee schedule for deposit accounts, and some at the bank think this fee schedule needs to include an “Equal Housing Lender” statement. We’re also wondering whether this would be required for privacy notices and disclosures — both of which we provide to both deposit and loan customers. Are these documents required to have the “Equal Housing Lender” statement? How about the “Member FDIC” disclosure?
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We do not believe that these documents need to include the “Equal Housing Lender” statement, nor do they need to include the “Member FDIC” disclosure. The Federal Reserve’s Equal Housing Lender advertising requirements apply to “any form of advertising of any loan for the purpose of purchasing, constructing, improving, repairing, or maintaining a dwelling.” Consequently,…
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We are considering providing perks (such as gift cards or concert tickets) to our mortgage loan customers who are first-time homebuyers. Are there any fair lending concerns with this type of program? Would we have to provide perks to all borrowers, not just first-time homebuyers?
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Assuming that the underlying loan program is not otherwise discriminatory, we do not believe that offering gift cards or concert tickets to a subset of your mortgage loan customers would be found to violate fair lending laws, but we do recommend monitoring the promotion, documenting your business reasons for targeting first-time homebuyers and remaining sensitive…
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Are there any size requirements for the following lobby notices: CRA Notice, Annual Financial Disclosure Notice, Equal Housing Poster, HMDA Data Availability Notice, and Regulation CC Funds Availability Notice? Can these notices be displayed on an electronic board that switches between the notices? What does the term “prominently displayed” mean with respect to the Equal Housing Poster? Also, can you confirm that we are not required to disclose our rates on a rate board in our lobby?
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There are size requirements for some (but not all) of the notices listed in your questions. If there are no express size requirements, generally these notices should be sized and placed so that customers are able to see the notices and easily read their text. Each notice is addressed separately below. CRA Notice: The size…
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If we perform a cash-out refinance of a loan secured by an eight-unit apartment building, are we required to obtain a termite inspection report? The existing loan was made by another lender. Do the apartment buildings need to be ADA compliant?
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We are not aware of any general requirement to obtain a termite inspection report when providing a cash-out refinancing of a loan secured by an apartment building. However, it is possible that a secondary market purchaser may require a termite inspection; for example, Fannie Mae requires termite inspections for multifamily properties in some circumstances. Otherwise,…
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Do we have to include the equal housing opportunity logo on all advertisements or just those that relate to mortgages and other types of loans?
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An “Equal Housing Lender” or “Equal Opportunity Lender” logo is required only on advertisements promoting loans for purchasing, constructing, improving, repairing, or maintaining a dwelling or loans secured by a dwelling. If an advertisement does not promote or mention mortgage loans, then this disclaimer is not required. For resources related to our guidance, please see:…