Case Study: Fair Lending Analytics and Advisory Services

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. The Fair Housing Act also prohibits discrimination in all aspects of “residential real-estate related transactions”. It is critical for financial institutions to consistently evaluate their lending practices and processes to mitigate all risks associated with fair and equitable lending.


Client Scenario

A mid-sized regional bank required additional expertise and analytics support to evaluate several years’ worth of pertinent data for fair lending. The bank recognized that it needed to perform advanced data analytics to identify any potential disparities in their lending activities and identified the need for general fair lending analytics training and advisory. This led them to partnering with Asurity Advisors.

Asurity Solutions

Asurity Advisors leveraged the Risk Exec software platform to methodically examine the bank’s loan data. This review encompassed performing redlining/mapping and statistical regression analyses on the bank’s HMDA-reportable and Indirect Auto loans to identify any potential geographic or borrower-based disparities in loan approvals and pricing. Throughout the Bank’s Fair Lending Risk Assessment Planning process, Asurity Advisors provided expert guidance and oversight, ensuring a thorough assessment. By entrusting Asurity Advisors with delivering a comprehensive fair lending analysis and advisory review, our hands-on approach mitigated the bank’s risk of unintentional biases in lending practices, unfair lending practices across all loan programs, and ultimately strengthened the bank’s posture and commitment toward fair lending.