Even though I'm pretty sure of the outcome of this, I wanted to see if anyone else has different loan polices established for your various regions you do business in that applies to commercial customers only. Right now, I am seeing fair lending and UDAAP as issues, but I wanted to get some feedback on what others have encountered.

What's the rationale for the differences?

The difference in our market areas as we located in various such as Western Oklahoma, Oklahoma City and Dallas where lenders provide different exceptions to their customers.

I would tread very carefully as I don't know what exceptions could be regional as to these laws as to policy requirements. Policies are general statements. You might get into pricing as an example, but in all regions you do not take into consideration any prohibited basis.

We had branches all over Texas and had 3 regions. Each region had it's product names and fee and it was a nightmare, especially for our consolidated call center. We ended up making it simple and made them all the same.

B75, be careful with your wording. By Commercial customer, do you mean a loan originating in the commercial loan department or a loan to a business? A loan could be consumer purpose and originate in any department and the same for business purpose.

Like Andy mentioned, policies are general. The pricing can be tailored to the market because of competition (e,g, VA loans near a military installation could be more competetive than areas where fewer military live), a lot of competition can lead to "price wars", etc. Since the creditor is making the loan (not the loan officer or area), policies should reflect the underwriting, pricing, etc. criteria based upon established (and quantifiable) risks, which would affect the entire bank. (Note - some areas might have higher unemployment rates due to composition of businesses, etc., but that should be an overall risk factor. Any different, the lender could be cited for Disparate Impact.) There could be "quantifiable" exceptions based on relationships, competition, etc., but they should be offered to all - not LO discretion. (Reason - most LO's would offer them to their favorite - or most persistant customer, and a "similarly situated minority applicant" might not get the same benefit.)