Program Overview
Fair Lending Analysis and Review (FLARe) is an instructor-led course that addresses the fair lending review of a bank with residual inherent risks not sufficiently mitigated. The course focuses on the requirements to document findings in the FDIC’s Fair Lending Scope and Conclusions (FLSC) memorandum.
Skills Taught
By the end of this course, students will have been taught how to:
- Evaluate bank products for potential discrimination inherent risk factors and any mitigating factors for residual fair lending risk
- Identify and prioritize potential focal point(s) to consider for in-depth analysis
- Analyze the approved focal point(s)
- Summarize the overall findings and conclusions of the fair lending review
- Apply analysis and critical thinking skills when evaluating and interpreting data in order to make recommendations
- Demonstrate professional communication skills when interacting with bank personnel
- Apply effective writing techniques when documenting findings in FDIC’s Fair Lending Scope and Conclusions (FLSC) memorandum
- Identify next steps after confirming fair lending issues
Duration and Format
This course contains:
- 24 hours of pre-course independent study
- 1 week of facilitated classroom discussion/lectures, including small group work, and case study assignments
Level and Credits
Basic
Continuing Education Unit (CEU): 3.3
Continuing Professional Education Unit (CPE): 39.0
Target Audience
FDIC participants should attend in accordance with the parameters outlined in the Examiner Training and Development Policy. State Banking Authority participants should have a minimum of 13 to 15 months of experience in compliance examinations after entering the compliance discipline. This course is open to appropriate staff of the FDIC and partner government regulatory agencies. This course is not open to the public or staff of private banks.
Prerequisites and Prior Work Experience
Prior to attending, FLARe school, all participants must satisfactorily complete:
- Introduction to Consumer Protection School (ICPS), formerly known as Introduction to Compliance Examinations School
- Introduction to Fair Lending (IFL) a minimum of 4 months prior to attending FLARe
FDIC participants must also complete grade 7 fair lending benchmarks and have hands-on experience with tools like Fair Lending Wiz.
Pre-Course Assignment
Participants are required to complete the following pre-course assignments and must be prepared to discuss this content on the first day of class:
- Review and memorize the Prohibited Bases characteristics for the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA)
- Review documents provided for the case study bank and complete Sections 1 and 2 of the FLSC
Post Course Feedback
A Summary Evaluation Form (SEF) documenting each participant’s learning will be completed by an instructor with input from the participant. The SEF will be provided to the supervisor approximately 30 days after the session ends. Specifically, the SEF will address each participant’s technical skills, communication skills, and overall class participation.
Key Topics
- Fair Lending Concepts Review
- Summarize the fair lending laws.
- List the prohibited bases.
- Recognize the three types of discrimination related to fair lending.
- Describe the fair lending review process at FDIC.
- Identify the five sections of the FDIC’s Fair Lending Scope and Conclusions (FLSC) memorandum.
- Institution Overview
- Identify effective writing tips
- Examine the bank’s structure and management, supervisory history, Compliance Management System, loan portfolio, and population demographics related to fair lending
- Describe the bank’s credit and market operations for underwriting, pricing, steering, marketing, and redlining related to fair lending
- Determine if the bank exhibits more than minimal inherent fair lending risk
- Compare your pre-course results to an answer key
- Discrimination Risks and Mitigating Factors
- Analyze bank products to identify potential discrimination risk factors.
- Evaluate mitigating risk factors
- Determine if residual risk is present and warrants further review
- Document the results from the analysis in Section 2 of the FLSC
- Focal Point Selection
- Describe potential focal point(s)
- Summarize the rationale for considering the potential focal point(s)
- Prioritize and support focal point(s) recommended for in-depth analysis
- Identify methods to analyze the approved focal point(s)
- Document results from the analysis in Section 3 of the FLSC
- Identify correct answers and provide support for conclusions
- Focal Point Analysis – Criteria Interview
- Identify appropriate interview techniques and strategies
- Develop Criteria Interview questions
- Conduct the Criteria Interview
- Interpret the bank responses during the Criteria Interview
- Focal Point Analysis – Comparative File Review
- Collect appropriate data
- Identify benchmarks and overlaps
- Identify matched pairs
- Analyze results of the comparative file review
- Focal Point Analysis – Bank Responses
- Solicit bank responses to disparities
- Evaluate bank responses to disparities
- Focal Point Analysis – Documenting Results
- Describe the steps used in the focal point analysis
- Determine when to conclude the focal point analysis
- Document the results of the focal point analysis
- Fair Lending Conclusions and Recommendations
- Document any results, conclusions, best practices, and recommendations in Section 5 of the FLSC
- Identify when and how to provide recommendations
- Recognize when to obtain approval
- Communicate the results of the fair lending review to Bank Management
- Retain FLSC and work paper documentation
- The Rest of the Story
- Describe the FDIC Process when examiners identify potential discriminatory fair lending violation(s)
- Describe the FDIC process for statistical analysis
- Summarize the importance of fair lending reviews by discussing examples of actual cases with discriminatory fair lending violations
- Feedback and Course Conclusion
- Receive 1-on-1 feedback on the FLSC Sections 4 and 5 of the Case Study and discuss the course overall.
- Discuss next steps for participant development
Continuing Education Information
For information regarding administrative policies such as complaints and refunds, please contact Corporate University, Attn: NASBA Representative Ava Livas, Room A-3025, 3501 North Fairfax Drive, Arlington, VA 22226 (703) 562-2463.
The Federal Deposit Insurance Corporation is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: NASBARegistry.org
The Federal Deposit Insurance Corporation (FDIC) is accredited by the International Association for Continuing Education and Training (IACET) (www.iacet.org). The FDIC complies with the ANSI/IACET Standard, which is recognized internationally as a standard of excellence in instructional practices. As a result of this accreditation, the FDIC is accredited to issue the IACET CEU.
More Information
For more information concerning course content and administration, please contact Joseph Ibarra or Sonya Staples.