determine whether reports of a renewed emphasis on fair lending
were accurate. Based on what we learned about the developments
that have contributed to a change in the tone from the top, I would
alter my answers slightly.
To the first question, I still say that in general, examiners do
a fair lending review at each examination; I now acknowledge,
however, that the industry can expect more intense assessments and
reviews with a different focus (e.g., loan modification processes).
To the second question, I stick with my original response and
say yes, that when examiners find fair lending violations, they
refer them to the DOJ. I now add, however, that the resources
the DOJ has dedicated to fair lending enforcement may result
in fewer cases being returned to the referring agency without
additional remedial measures to make whole borrowers as well
as communities impacted by the violations.
To the final question, my initial answer stands more than
ever. Fair lending violations will continue to contribute to poor
compliance ratings and downgrades in CRA ratings. In fact, over
the last 18 months we have seen an increased incidence of CRA
rating downgrades due to fair lending violations.
About the Author
bOnItA G. JOnes, president of San Francisco-based Bonita
Jones & Associates, LLC, is a retired principal in the Banking
Supervision and Regulation Division of the Federal Reserve Bank
of San Francisco. Reach her by e-mail at firstname.lastname@example.org or by
telephone at (415) 297-1784.
1 Shulman-Reed, Elise. “Off the Cuff: Thomas
Perez, Assistant Attorney General, U.S.
Department of Justice.” The Oberlin Review,
Sept. 23, 2010.
2 Kilgore, Austin. “DoJ Mortgage Probes May
Overextend Authority: K&L Gate.” January 28,
4 President Barack Obama established the
Financial Fraud Enforcement Task Force
in November 2009 to wage an aggressive,
coordinated, and proactive effort to investigate
and prosecute financial crimes. It is composed
of representatives from a broad range of federal
agencies, regulatory authorities, inspectors
general, and state and local law enforcement.
5 Remarks as Prepared for Delivery by Assistant
Attorney General for Civil Rights Thomas
E. Perez on Fair Lending and Fair Housing
at the Brookings Institution, June 23, 2010,
6 Jefferson, Cord. “The Root: How President
Obama’s Civil Rights Policies Are Benefiting
October 29, 2010.
7 Testimony of Assistant Attorney General Thomas
E. Perez Before the House Subcommittee on the
Constitution, Civil Rights, and Civil Liberties,
Thursday, April 29, 2010.
8 The referrals involved allegations that the lender
denied credit card applications to borrowers
who had exercised their rights under the
Consumer Credit Protection Act by putting
fraud alerts or military active duty alerts on their
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