Why Should You Avoid Discriminating

Because if discriminatory housing/lending practices are challenged, you could be subject to the following remedies:

  • Civil Penalties
  • Injunctive Relief
  • Lawyer’s fees
  • Monetary damages
  • Punitive Damages

Lender Do’s: Best Practices to Avoid Liability

  • Laws and Regulations - Comply with all applicable state and federal laws and regulations
  • Confidentially - Respect borrowers’ privacy rights by complying with federal and state privacy laws.
  • Equitable Treatment - Maintain a work environment that encourages compliance with these fair lending and consumer best lending practices and facilitates the fair and equitable treatment of consumers.
  • Professionalism - Endeavor to employ a workforce of talented, qualified individuals with diverse backgrounds in compliance with applicable laws.
  • Procedures and Training - Establish internal compliance, fair lending, servicing, quality, audit and disciplinary procedures. Provide training to employees.
  • Compliance - Establish internal procedures to promote compliance with these best practices and applicable law; take appropriate steps to rectify problems.
  • Report Violations - Encourage every employee to report violations to senior management.
  • Internal Review - On a periodic basis review random samples of loan files to determine compliance.
  • Customer Contact Employee Evaluation - Evaluate the behaviors of "customer contact employees" through appropriate measurement tools.

Federal Housing & Lending Anti-Discrimination Legislation

  • 42 USC. § 3605(a): It is unlawful for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such transaction, because of race, color, religion, sex, handicap, familial status, or national origin
  • Additional federal laws: Real Estate Settlement Procedures Act (RESPA) and the Home Ownership and Equity Protection Act (HOPEA
  • Equal Credit Opportunity Act: Prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives income from a public assistance program
  • The Fair Housing Act: Prohibits discrimination in housing (including mortgage lending) on the basis of race, color, religion, national origin, sex, disability, and familial status
  • Truth in Lending Act: Requires clear disclosure of key terms of the lending arrangement