Pub. 16 2021-22 Issue 1

NEBANKERS.ORG 20 Kevin Kim, associate general counsel, joined Compliance Alliance after graduating from the Benjamin N. Cardozo School of Law in 2019. He currently serves our members as one of our hotline advisers, where he spends his days guiding our members and writing articles for our weekly and monthly publications. Before C/A, he worked at Galaxy Digital and Refinitiv (formerly Thomson Reuters Financial and Risk) as a law clerk. He also opened a cryptocurrency mining farm, and founded an after-school program business in his native New York City. His unique experience and outlook have brought an invaluable new dimension to our group. Since 1857, Cline Williams has devoted attention to the unique needs of the banking and nancial services industries. Since then, we have provided our clients with the resources they need in the areas that are most important to them – from lending and collections, to regulatory compliance, to mergers and acquisitions, and so much more. We’re more than a law rm. We’re a partner for your bank. LINCOLN I OMAHA I AURORA I FORT COLLINS I HOLYOKE staff responsible for, or are involved in, mortgage lending operations. Additionally, the bank should establish policies and procedures to help the staff comply with regulatory requirements when preparing disclosures. Finally, the bank should also consider implementing a centralized process to complete or review disclosures to ensure accuracy. Fair lending was also a big concern when evaluating bank compliance. During the 2020 examinations, the FDIC found a bank that would automatically deny applicants under 30 years of age. Furthermore, the source of income was provided using a drop-down menu and any applicant who did not choose employment was denied. There was another case where a credit-scoring model scored younger applicants more favorably than it scored elderly applicants. It also negatively considered applicants who were on maternity leave. Additionally, there was a bank policy that provided the loan officer should use the highest credit score of the two applicants when the applicants were married, but the primary applicant’s credit score would be used when the joint applicants were unmarried. To address the fair lending risks, banks could consider regularly reviewing credit policies to ensure the Equal Compliance Alliance — continued from page 19 Credit Opportunity Act and Regulation B permit such considerations. The FDIC finds that a strong compliance management system helps ensure that financial institutions treat consumers more fairly. Moreover, the bank should review any filers or other criteria used for online leads, website applications, and credit scoring models. With such an unprecedented pandemic sweeping across the nation, many areas needed adjustments to adapt to the changing environment. Regardless of the impact of COVID-19, banks should continue to set up and monitor compliance programs to ensure that the banks are complying with the appropriate regulations for their business activities. 