16 November 2017
of those statements. To ensure the accuracy and
completeness of your P&P, you should take these
• Catalog. Make an inventory of all your P&P
that touch on fair lending. These are more than
just the typical fair lending program related
documents. These also include documents such
as underwriting policies, sales practices policies,
pricing policies, etc.
• Curate. Once you perform the cataloguing
exercise, you may find that many of these P&P
are redundant or duplicative. If that’s the case,
then eliminate the policy. You may also find that
some policies are simply no longer applicable
to your organization. Eliminate those as well.
Sometimes less is truly more.
• Identify Owners/Confirm Accuracy. Many of
these policies describe very specific tasks.
Have the owners of these tasks review the
language to ensure that what is being described
reflects current practices. If not, then delete the
language or fix it.
Job Specific/Organization Specific. Training is
an area where organizations generally do a decent
job. There is a lot of very good training material out
there that very clearly defines the requirements of
fair lending. The problem with externally purchased
materials is that they’re not customized to your
organization or specific job roles.
• Organization Specific. If there are tasks required
of all employees of your organization, they
should be highlighted in your training materials.
For example, if all employees are required to
escalate fair lending related complaints, make
sure that process is outlined in your training.
• Job Specific. Regulators often focus on whether
your training materials are job specific. The
core fulfillment roles that should be highlighted
are for sales, processing, and underwriting.
For example, in the processing and sales roles,
C. Monitoring and Corrective Action
providing the same “level of service” to all
consumers is always a concern. This can be as
simple as having standardized Service Level
Agreements for all files—e.g., call back all
customers at least once every three days, return
voicemails in the order received, etc. Try to
add at least a few slides for each role so those
employees can understand the importance of
fair lending for their specific role.
Be creative. There are numerous options for
monitoring. Most organizations have a good handle
on the very traditional compliance monitoring
• Risk assessments – holistic reviewing of your
organization to determine where the greatest
fair lending risks lie
• Loan file testing – the standard review of
approved, withdrawn, and declined files for
accuracy, discrimination concerns, etc.
• Exception monitoring – pricing exceptions,
underwriting exceptions, etc.
Beyond these core functions are any number
of other ways that you can conduct monitoring to
provide additional insights into the fair lending
risks present in your organization. One tool used
by consumer advocacy groups and regulators alike
is mystery shopping. There are a number of firms
that will do this for you (for a cost of course), but
your teams can do this in a more limited fashion for
a very minimal cost. For example, you could leave
voicemail messages to your loan officer teams in
the early morning hours (before they’ve arrived for
the day) with different genders or ethnicities very
obviously delineated, and see who your employees
call back first. You could do the same with e-mails
to your teams. Who do they call back sooner—
Grayson Weatherford III or Maria Hernandez?
This type of monitoring serves two purposes: (1) it
gives you a sense of how effective your program
and training is, and (2) it brings awareness to your
production teams that discrimination comes in a
variety of different forms.
Close the Loop. This will undoubtedly be
obvious to most of you, but if your monitoring
makes clear a fair lending concern, you will need
to document how you’ve remediated that concern.
If additional training was required, make sure that
is tracked. Keep a library of all of your remediation ∆