Fair Lending Analytics Services
FTI Consulting provides a suite of software tools and consulting services that enable clients to satisfy compliance requirements for Fair Lending, Anti-Money Laundering (“AML”), fair debt collection practices, unfair and deceptive and abusive acts or practices (“UDAAP”), elder financial abuse and more.
Banks and non-bank financial institutions have been under increasing pressure to demonstrate to federal and state government authorities that they are “on top of their compliance game.” Law firms are increasingly being asked to help clients defend potential regulatory actions and lawsuits on purported violations of law and regulations across relevant regulatory regimes. In addition, the CFPB, DOJ, HUD and federal prudential bank regulators have issued various guidance and taken numerous actions indicating that financial institutions must be proactive, not reactive, in monitoring for patterns of potentially discriminatory lending activity.
Meeting the Challenges
FTI Consulting’s Fair Lending Analytics Services include three technology capabilities that rebut fair lending allegations and proactively analyze lending practices: LEADr (Loan Evaluation/Analytics Data Repository), ART (Allegation Response Tool) and LID (Loan Information Database). Although we specialize in mortgage fair lending analysis, we perform fair lending analyses on any structured lending data within an institution, including automobile, credit card and student loans.
Our subject matter experts and statisticians assess the potential for disparate impact and disparate treatment on one or more prohibited ECOA/Regulation B and the Fair Housing Act bases such as race, color, national origin, age, sex and/or marital status using any or a number of parameters such as pricing, disparity ratios and/or denial percentages, loan officer compensation and more. We utilize HMDA data for mortgage-related assessments and proxy data analysis for non-mortgage related assessments to respond to and rebut alleged violations. Furthermore, we conduct mock examinations; help implement or enhance fair-lending risk assessment programs; analyze existing pricing models or propose new models; set up or review fair lending allegation response programs; review and enhance lending policies and procedures; and provide fair lending training, including assisting clients perform their own statistical analyses to meet and/or exceed regulatory expectations for effective compliance management.