How to Identify and Address Fair Lending Red Flags

Regardless of the administration or regulatory environment, all lenders should strive to avoid fair lending risk.

When evaluating fair lending risk, does your institution overlook any areas? Where does your focus lie? Too often, lenders focus on the mountain ahead (their overall risk management strategy) but fail to address the pebble in their shoes (commonly overlooked red flags). Too often, these pebbles can become boulders and, if not mitigated, become more significant issues that affect the entire institution.

With that in mind, here are eight common red flags that could indicate potential fair lending risks and actionable strategies to address them.

Discretion or Exceptions in Underwriting and Pricing
Lack of Clear Standards for Product Referrals
Overlooked Audit Findings
Infrequent Complaints
Incentivizing Noncompliance
Weak Compliance Management
Failure to Analyze Loan Data
Ignoring Risk Indicators

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Compliance

How to Identify and Address Fair Lending Red Flags

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