Ben Bernanke Weighs in on Housing Discrimination
Yesterday Federal Reserve Board Chairman Ben Bernanke gave a speech at the Operation HOPE Global Financial Dignity Summit in Atlanta. Bernanke’s remarks were among the most forceful comments about housing discrimination and fair lending that I can remember a Fed chairman making in my more than 20 years of working in the fair lending arena. Here is an extract from the Chairman’s speech.
“While the economic recovery and regulatory policy affect access to credit for all households, some potential borrowers may face the added burden of discrimination. In our role as a banking regulator, the Federal Reserve strives to ensure that the banks we supervise obey laws that prohibit illegal discrimination in lending. …
Two types of discrimination continue to have particular significance to mortgage markets. On is redlining, in which mortgage lenders discriminate against minority neighborhoods, and the other is pricing discrimination, in which lenders charge minorities higher loan prices than they would do to comparable nonminority borrowers. The Federal Reserve has been vigilant in identifying and stopping such abuses, and we remain committed to enforcement of the nation’s fair lending laws. We currently co-chair, with the Department of Justice, an interagency task force to promote robust fair lending supervision and enforcement.”
We should all take note the Chairman’s statements regardless of whether you are regulated by the Federal Reserve or not. Bernanke is echoing what other prudential regulators and the CFPB have also said in so many words. Please perform the fair lending risk assessment that is appropriate for your institution. And, remember that risk assessments include assessing the risks associated with your compliance management system as well as the quantitative monitoring of that system.
Preiss&Associates has been doing custom fair lending analyses for more than 20 years. If you have fair lending questions, want to talk about your fair lending issues or have need for us to assist you with your fair lending program give us a call at 847-295-6881 or drop us an email at [email protected]