Big Picture
The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction. It applies to any extension of credit, including extensions of credit to small businesses, corporations, partnerships, and trusts. It is critical for financial institutions to consistently evaluate their lending practices and processes to mitigate risks associated with fair lending. While fair lending is often associated with mortgage, ECOA and the principles of fair lending apply to all extensions of credit, including direct and indirect auto lending, amongst others.
Client Scenario
Following the review of its fair lending data, a credit union sought a review of their loan pricing data for automobile secured loans. The credit union engaged Asurity Advisors as a trusted partner to validate loan pricing and test for compliance with fair lending laws and regulations in the auto loan portfolio. Leading with a meticulous preliminary assessment of the credit union’s loan data, Asurity Advisors developed a tailored methodology and assigned a highly skilled team with extensive experience in loan operations and fair lending to complete the validation.
Asurity Solutions
Asurity Advisors conducted a comparison of loan data within the credit union’s system of record against loan-level documentation. Asurity Advisors successfully conducted a rigorous review process. For loans that required some form of remediation, Asurity provided clear and actionable recommended solutions to address these issues. To that end, Asurity Advisors further supported the credit union with root cause analyses of the pricing disparities.