Fair Lending for Commercial Loans - What's New?

The Equal Opportunity Act has always applied to both consumer and commercial lending, making commercial loans a target for Fair Lending scrutiny. The focus has traditionally been on consumer mortgage loans that require the collection of demographic data. Regulators haven't typically issued significant enforcement actions in the commercial lending area for Regulation B violations. However, the pending implementation of the Section 1071 rules for data collection of minority-owned and women-owned small business applications will bring a new era of fair lending analysis. Will your bank be ready for these changes? What new reputation risks are on the horizon?

Recorded Tuesday,
September 20th, 2022
Presented by Susan Costonis
1h 30m total length
$279.00 or 1 Token

Includes: 30 Days OnDemand Playback, Presenter Materials and Handouts

  • Auditing
  • Collections
  • Commercial/Business Lending
  • Compliance
  • CRA Compliance
  • General Compliance
  • Lending Compliance
  • Risk Management/Legal
  • Bank Legal Counsel
  • Board Member
  • Commercial Lender
  • Community Reinvestment Act Officer
  • Compliance Officer
  • Credit Analyst
  • Internal Auditor
  • Loan Operations Manager/Specialist
  • Risk Manager
  • Senior Management
  • Small Business Lender

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There have always been specific fair lending risk factors for commercial loans, but not a great deal of attention from regulators who are more focused on the safety and soundness aspect of commercial loan portfolios. What will your examiners begin to review with the advent of the 1071 rules? When an examiner compares a file for a denied women or minority-owned small business applicant to an "established GOOD commercial customer" will your bank be able to justify the decision? Will the collection activities also receive more scrutiny?

These five areas will be a reason to "fine-tune" fair lending training in the commercial loan area: Vague or subjective underwriting, Risk-based pricing that's not based on objective criteria, Lack of File Documentation and exception tracking, Marketing and advertising practices, Patterns of lending and exclusions identified in the most recent CRA exam. SPECIAL NOTE - the proposed CRA rules specifically reference the use of 1071 data analysis.


What You'll Learn

This program will include an overview of potential fair lending red flags, but also often solutions for a successful program for commercial lenders that include:

  1. Understanding fair lending risk in the commercial product line
  2. Controls for written underwriting ,pricing standards and collection activities
  3. Exception guidelines including exception authority, tolerances and trends
  4. Overview of the 1071 rules and impacts
  5. Tools for fair lending training

Who Should Attend

This program is designed for Chief Credit Officers, commercial lenders, commercial loan assistants, Compliance Officers, auditors, Fair Lending officers, Collections staff, Loan Administration staff, CRA officers

Susan Costonis

Instructor Bio

Susan Costonis is a compliance consultant and trainer. She specializes in compliance management along with deposit and lending regulatory training.

Susan has successfully managed compliance programs and exams for institutions that ranged from a community bank to large multi-state bank holding companies. She has been a compliance officer for institutions supervised by the OCC, FDIC, and Federal Reserve. Susan has been a Certified Regulatory Compliance Manager since 1998, completed the ABA Graduate Compliance School, and graduated from the University of Akron and the Graduate Banking School of the University of Colorado. She regularly presents to financial institution audiences in several states and ?translates? complex regulations into simple concepts by using humor and real life examples.