The never-ending sequel to fair lending: fair servicing

Credit unions continue to help members by modifying loans, lowering fees, allowing skipped payments and offering other options for assistance. The compliance team has written plenty of blogs about these options and associated regulatory considerations. Now it’s time to flag another important concern when it comes to assisting members: fair servicing. This blog about fair servicing is simply a reminder that fair lending standards apply for the entire life of the loan. This means that credit unions might choose to expand their fair lending policies, so they more clearly apply to areas other than just the initial application stage.

NCUA’s Fair Lending Guide offers some insight on the scope of fair lending requirements:

“Under the [Equal Credit Opportunity Act] ECOA, it is unlawful for a lender to discriminate on a prohibited basis in any aspect of a credit transaction, and under both the ECOA and the [Fair Housing] Act, it is unlawful for a lender to discriminate on a prohibited basis in a residential real-estate-related transaction. Under one or both of these laws, a lender may not, because of a prohibited factor: […] Fail to provide information or services or provide different information or services regarding any aspect of the lending process [or] treat a borrower differently in servicing a loan or invoking default remedies.


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