I was recently doing a Reg. B review of our loan files. We have some fairly new compliance folks in our group and was wondering if we all really know what we are looking at/for, even when using a good checklist. How do you tell that a wife’s financial information was used for a commercial loan, (or any loan), that she was really not involved in? How are examiners find out that banks have discriminated against pregnant women? And the other items that come from Reg. B. And all of this coming from a file. Are people actually making notes in the file to this affect?
So, with that I was wondering if you could do a meeting on this type of review with us. (You may already have and I was not in the group then.) There are some old items still in the checklists, like using verification that the applicant has a telephone.
I recommend using your regulator’s fair lending exam manual as a guide for your internal fair lending review. It will likely give you sample questions to use to determine if a spouse’s information was used without cause. And ways you can determine if discrimination may have occurred is a file comparison where you compare originated vs. denials and originated control group vs. originated prohibited basis group and compare the underwriting criteria to determine if the denial or different terms were justifiable. In the case of discrimination against a pregnant person, I would think that would have to be through a note in the file, observation, or reported by the customer.
Again, your regulator’s fair lending exam manual is a good place to start your internal assessment.