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Exam Criteria Addressed By NCUA Fair Lending Letter
WASHINGTON (3/20/13)--In a new letter to federal credit unions (13-FCU-02), the National Credit Union Administration said it will select a number of federal credit unions to undergo a fair lending examination this year, and outlined the factors that agency examiners will use to determine whether a federal credit union should be subject to further fair lending reviews.

Credit Union National Association President/CEO Bill Cheney said CUNA will follow up with the agency on fair lending issues to provide more information to the credit union system. "CUNA recognizes credit unions must obey the law, but we have urged NCUA to refrain from directives and sanctions unless, based on measurable factors, the agency can demonstrate material compliance issues exist. We will continue to press this view," he added.

Federal credit unions that are selected for a fair lending exam or off-site supervision contact "will have demonstrated the potential for a higher fair lending risk" based on certain criteria discussed in the letter, including fair lending violations and general compliance risks, the letter noted.

Credit unions' whose Home Mortgage Disclosure Act report results fall outside the normal range for pricing, denials, withdrawals, or lending terms when compared to other financial institutions may also be subject to these examinations, the agency said.

Selected federal credit unions that fit the exam criteria will receive advance written notification of the exam or off-site supervision contact from NCUA's Office of Consumer Protection, according to the letter.

Off-site fair lending supervision contacts will also be made in certain situations, the agency said.

The NCUA's new fair lending educational and compliance tools, and off-site supervision contacts to help federal credit unions comply with fair lending laws, are also highlighted in the letter. The agency has also provided credit unions with a guide describing fair lending law and regulations, credit union operational requirements, issues to consider when developing fair lending compliance policies, and checklists for testing compliance with laws and regulations, or developing a fair lending policy for compliance.

The NCUA will provide an overview of its 2013 fair lending examination program and detail fair lending best practices during an April 4 webinar. (See related story: Fair Lending Is Topic Of NCUA April 4 Webinar.)

For the letter, use the resource link.

The NCUA also announced an April 4 webinar on fair lending. (See News Now story: Fair Lending Is Topic Of NCUA April 4 Webinar)
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