Article provided by: ComplianceTech
Everyone deserves a chance to own a home or a car and is your right to get a loan solely based on how responsible you are and not by the color of your skin, sex, age, and your religion. There are more than 247 different ethnic groups and languages in the United States of America. The fair lending regulations ensure that everybody gets the same fair treatment and are judged by the same fair standards when looking for different loans. Both the lender and the borrower should understand the existing fair lending regulations. Failure to comply with the laws as a lender you risk being fined or your license being revoked. As a company, we are committed to ensuring that you as a lender or borrower you understand the rules and your rights as well.
The two fair lending regulations
1. Equal Credit Opportunity Act 1974 (ECOA)
The Federal Reserve and the FTC enforce this law. The sole role of this fair lending regulation is to provide the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status or age. After studies done in the early 1990s, there was evidence that race was a primary factor for some lenders. Federal agencies collectively released and signed what is known as the "Interagency Policy Statement on Discrimination in Lending. This landmark policy states.
Discrimination in lending by race or other prohibited factors is destructive, morally offensive and unlawful. The law protects people who are discriminated in any way from enjoying the advantages of accessing loans. The agencies can’t tolerate any form of lending discrimination for all borrowers staying in the United States of America. Additionally, fair lending is not inconsistent sound and safe operations. This fair lending regulation applies to all lenders, mortgage brokers, and issuers of credit cards or any other types of credit.
2. Fair Housing Act 1968
HUD enforces this Fair Housing Act. The regulation aims to protect people from any form of discrimination in all residential real estate transactions. For instance, if you need a loan to buy, repair or build your home or if you wish to purchase a home. If you want to sell, broker, or appraising residential real estate. Or even sell or rent a dwelling. Violations of this act can carry a 10,000 dollar penalty per violation or even up to one year in jail.
By knowing your rights, you can insure yourself fair treatment when seeking credit, home loans, and the like. We all have the right to be judged by the same standards. On the other hand, if your credit score is impressive and you prove you have a stable source of income enabling you to repay the loan, the lender has no reason to turn down your application. In case, you are denied not for no apparent or satisfying reason from any lender; you are within your right to sue the lender.
As a lending company owner, you should ensure that your business complies with the above two fair lending regulations. You can consult us to help you with our latest software that allows you to comply with all lending regulations set by the state easily.
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