Fair Lending

Recent regulatory supervision and enforcement activities clearly signal the importance of establishing an effective fair lending program, supported by preventive and detective controls. Risk management efforts include identifying and defining inherent risk, establishing standards and controls for limiting risk, and initiating appropriate corrective action plans.

Qualitative risk relates to the effectiveness of policies and procedures, complexity of business practices, and ultimately how effective an institution’s internal controls are at limiting risk. Quantitative risk is identified through statistical analysis, monitoring and testing, and comparative file reviews.  Performance analysis should focus on disparities in levels of assistance, underwriting outcomes, application fall out rates, pricing, steering, and redlining. In addition, lenders should evaluate and understand the credit needs of communities within their market areas.

Fair Lending services include:

  • Program Development
  • Program Review/Audit
  • Performance Analysis
  • Comparative File Review
  • Credit Needs Assessment
  • Advisory
  • Enforcement Remediation
  • Examination Assistance
  • Training


The accuracy and completeness of an institution’s Home Mortgage Disclosure Act (HMDA) data is critical to fair and responsible lending risk management, as well as Community Reinvestment Act (CRA) performance. In addition, the low tolerance for errors imposed by federal and state regulators increases the need for a comprehensive data integrity management process.  We assist lenders in validating the accuracy and completeness of HMDA data through statistical and systemic comparative analyses, as well as reviewing processes, procedures, and systems.

HMDA services include:

  • Process Review
  • Systemic Data Integrity Review
  • File Review
  • Parity Analysis
  • Peer Analysis
  • Mapping
  • Training


Depository institutions are subject to the Community Reinvestment Act (CRA) which is intended to encourage efforts to meet the credit needs of the communities they serve specifically low and moderate-income neighborhoods.  Evaluating an institution’s CRA performance includes developing performance context and assessing lending, service, and investments test performance. We assist clients in reviewing performance consistent with a regulatory examination, establishing performance parity analysis, evaluating assessment areas, and ensuring the accuracy of the CRA loan register.

CRA services include:

  • Process Review
  • Performance Review
  • Data Integrity
  • File Review
  • Parity Analysis
  • Peer Analysis
  • Mapping
  • Training

Representative Engagements


  • CRA Performance Review– analyzed performance in anticipation of an upcoming exam, including lending, service, and investment tests
  • Credit Needs Assessment– conducted a mortgage credit needs assessment of a selected MSA to identify housing needs, obstacles, and opportunities
  • CRA Parity Analysis – analyzed lending activity compared to demographic and market data to identify gaps in lending performance
  • Fair Lending Advisory– acted as an advisor to fair lending team in the development of statistical models designed to assess risk associated with marketing, underwriting, pricing, and loss mitigation
  • Fair Lending and UDAAP Audit Program Development– developed audit programs to assess the effectiveness of internal risk management efforts associated with loan origination and servicing
  • Fair Lending Examination Assistance– acted in an advisory role in responding to examination requests, evaluating redlining risk, and preparation for referral to DOJ
  • Fair Lending Performance Review – performed an analysis of HMDA data to identify disparities in levels of assistance, underwriting, and pricing, as well as risk associated with steering and redlining
  • Fair Lending Program Audit– performed an audit of the bank’s fair lending compliance management system (FL CMS)
  • Fair Lending Program Review– comprehensive evaluation of the fair lending CMS and assistance in enhancing internal control environment
  • HMDA Data Integrity– validated the accuracy of HMDA data previously submitted or in preparation for an upcoming submission using systemic data routines to identify errors and omissions

View Engagements