Mass. Task Force To Investigate Fair Lending Practices
The Massachusetts Credit Union League, along with state and federal regulators and local community and financial institutions, has formed a task force "to promote and ensure fair and equitable lending to all individuals."
A spokesman for the Massachusetts CU League said the Massachusetts Fair Lending Task Force formed and held organizational meetings in late 2004. Now, the task force is sending a survey to financial institutions, including league-member credit unions.
The survey's purpose is to document efforts to promote and ensure fair lending practices, the group said. In addition, it will capture information on industry procedures, including effective models and best practices. The aggregated data will be made available to all lenders.
"The task force is doing its background work," said Rob Kimmett, the Massachusetts CU League's senior vice president of marketing. "We are reaching out to our membership through the survey."
Survey responses are due back May 20.
Denial Rate Disparity
According to the task force, in Massachusetts, as well as other states, there is a disparity between the denial rates for black and Latino homebuyers compared to white loan applicants. The task force's goal is to develop a better industry-wide understanding of the reasons for the higher loan denial rates for certain groups.
As the reasons for the disparity become better defined, the task force will make recommendations to improve lending to minorities.
Kimmett said the Massachusetts CU League got involved in the task force "because this is very close to our DNA as credit unions."
"Like California, we have socially aware and active legislators. They have reached out to us- not with the threat of legislation, but they have asked what are we going to do?"
The Massachusetts Fair Lending Task Force includes Lowell, Mass.-based Jeanne D'Arc Credit Union and Fitchburg, Mass.-based Worker's CU, as well as the Federal Deposit Insurance Corporation, the Fair Housing Center of Greater Boston, the Massachusetts Affordable Housing Alliance, Massachusetts Mortgage Association and several banking groups.
In addition to the survey, the task force plans to hold regional meetings to solicit broad-based industry, community and government input on ways to expand outreach. The group said it will involve Fannie Mae and Freddie Mac in evaluating the impact of secondary market guidelines and procedures on mortgage loan approvals and denials.