Systems and Methods for Early Fair Lending Violation Detection

摘要

As long as mortgage lenders allow some degree of flexibility in their loan pricing, strong fair lending controls are required to avoid/defend against discrimination claims, whether intentional or inadvertent “disparate impact.” Pricing engine technology combined with the process and methodology can help lenders to efficiently reduce the risk of fair lending compliance issues. Pricing engines can help a lender lock down pricing, enforce limits on discretionary adjustments, enforce/document approval authority for granting concessions or exceptions, limit the potential for errors, and provide the data/documentation needed to respond effectively to regulatory inquiries. Further, pricing engine technology can facilitate real-time monitoring for potential pricing disparities, and serve as the basis for an “early-warning” system that flags pricing disparities as they develop. The current regulatory climate demands that mortgage lenders place greater reliance on up-front fair lending preventive controls, rather than waiting to identify fair lending issues only after they have occurred.