Affordable Loan Program and Fair Lending

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Question:

We have an affordable loan program that is specifically geared towards minorities, females, household incomes that are less that 80% of HUD's MSA Median Family Income, a property located in a low income census tract or that is considered mostly minority and a first time homebuyer that does not meet any of the above -- any of these individuals will receive an 1/8% rate reduction. Are there any fair lending/CRA issues that we need to be concerned about?

Answer:

You are meeting the spirit and intent of making credit more available. While there could be opposition that you are creating reverse discrimination, the real case is that you are making it more accessible to an underpriviledged few.

What you need to do is adequately track what is done and how to get CRA credit and toot your own whistle if the need arises.

First published on BankersOnline.com 6/3/02