The landscape is changing, however. Stepped-up federal and state
enforcement efforts—including a notable increase in investigations and
settlements involving smaller players—have captured the attention of many
compliance officers and in-house counsel concerned with avoiding fair lend-risk. These factors, combined with strong signals from the Obama administration that lending discrimination will be a major enforcement priority, and
a wave of fair lending class action lawsuits, have prompted many small
banks and nonbank mortgage lenders to join the larger
players and implement wholesale price monitoring
programs.
Making the decision to monitor
is just the beginning. Lenders that
choose to invest the resources
ing
to create and
implement monitoring pro-
grams have to address many practical
challenges. The main goal is to develop and
implement a program that will identify and effectively
alleviate price disparities across different races and ethnicities
while disrupting the lender’s business as little as possible. Balancing
these considerations is difficult, but managing the fair lending risks associated
with wholesale lending is now more important than ever.
