We have a situation where a customer wants to file a complaint against the bank because of their experience with one of the brokers that we work with.

We are having an internal dispute as to whether or not this should be a complaint against the bank or the broker. One person is saying "they aren't a customer of ours until we close on the loan, so the complaint shouldn't be against us". Our fair lending officer is saying - nope - the broker is acting on behalf of the bank and at the moment the broker takes the application, anything they do that violates fair lending laws is the bank's responsibility.

Background - the complaint is primarily due to an application that sat in suspense for almost a month before the bank did anyhting with it. The applicant is alleging we are discriminating based on race.

Looking for guidance on how to proceed.

"Background - the complaint is primarily due to an application that sat in suspense for almost a month before the bank did anyhting with it."

How is that not a complaint against the bank. While the broker is not an agent of the bank, unless for some reason you have unwisely indicated as such in your broker agreement, once that application is submitted to the bank, the bank owns it.

That makes sense.

Using a different example.....wouldn't the bank be "on the hook" for any discriminatory behavior on the part of the broker at the time of application? For example, the application was taken on 4/1, but not submitted to the bank until 4/10. If the applicant has a complaint about the broker for something that happened during that 10-day window, wouldn't it be the bank's responsibility to respond to the complaint?

Or, is this where our agreement comes into play? If they are acting as an agent of the bank, then yes - as of 4/1, it becomes our responsibility to respond to any complaints?

If you are agreeing to accept applications from a broker, it becomes one of those things like "The sins of the father are the sins of the son". That is why your vendor due diligence is so important in these sorts or relationships. I hope you are no longer doing business with them if you suspect that they are not meeting your broker agreement which should specifically outline the requirements as to who is responsible for what when they take an application. You actually allow the broker to produce the LE so that you are locked into all the costs that they disclose?