When autocomplete results are available use up and down arrows to review and enter to select.
Community banks have a strong track record of providing access to credit in the communities in which they are located and take their fair lending obligations very seriously. A recent trend of increased scrutiny and changed methodologies in fair lending exams and investigations has resulted in “false positive” findings of disparate treatment, thus requiring the affected community banks to spend large amounts of time and money in disproving false fair lending allegations.
Community banks are particularly vulnerable to such allegations because they are committed to working with their customers to provide customized loans under exceptional circumstances. This raises red flags and too often draws fair lending allegations.
Premature or unfounded allegations of racial or ethnic discrimination can harm a community bank’s reputation. Therefore, the confidentiality of specific community bank information should be preserved while investigations are being conducted and before conclusions are reached.In September of 2020, HUD finalized a rule that amended the agency’s interpretation of the Fair Housing Act’s disparate impact standard to better reflect the Supreme Court’s 2015 ruling. However, in June of 2021 HUD proposed rescinding the 2020 rule in favor of returning to the 2013 standard. ICBA believes that an outright return to the 2013 rule is inappropriate because that standard is not in line with the Supreme Court’s decision in Inclusive Communities.