Are Testers in Your Lobby?

On ABA's annual Compliance Symposium (teleconference), Steve Cross, OCC's Deputy Comptroller for Compliance Management, stated that his agency is seeing an increase in complaints based on matched pair testing.

In this context, Cross also discussed some concerns about using testing for fair lending analysis. The lending process is complex and tests must be carefully designed. Testing for rental discrimination is much simpler. For example, if a landlord tells a minority tester at 2:20 that he has no more units available, but tells a white tester at 2:30 that same day that a unit is available, the tests are a good measure of discrimination.

However, testing for lending is more difficult. Because loans are not usually unavailable, the simple availability of credit is not usually the content of the test. In addition testers may speak with different loan officers. If each loan officer is consistent with their treatment of their customers, but one is friendlier than the other, this is not, Cross believes, discrimination.

Cross stated that the complaints based on testing generally rely on only a few tests. Because of the complexity of testing for lending discrimination, these tests do not always provide strong evidence.

Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3 , No. 5 & 6, 4/98