BOSTON - Banks should develop strategic plans for fair- lending, much the way they plan other parts of their business, industry experts advised this week.
Such plans can be used to show regulators what the bank is trying to accomplish in fair-lending and how well it is succeeding, a panel of consultants and regulators at the American Bankers Association's regulatory compliance conference here explained.
The session attracted a standing-room-only crowd.
Glen Brewer, a fair-lending specialist in the Chicago office of the Federal Deposit Insurance Corp., advised the bankers to make fair- lending compliance a continuing concern.
"The best time to lay the groundwork for the next exam is right after this exam," he said.
Timothy D. Marrinan, executive vice president of Barefoot, Marrinan & Associates in Columbus, said bank employees should know their responsibility before examiners arrive.
A bank must provide fair-lending training for its staff, and that training should be documented, he said.
The FDIC's Mr. Brewer concurred.
"Make sure all members of your staff have been through fair- lending training," he said.
The bank should then start reviewing policies and products to gather information that will prove the bank's compliance, Mr. Marrinan said.
Banks also can give examiners copies of product designs, pricing, and marketing plans to show compliance. Especially impressive are marketing strategies that help meet fair-lending requirements, he said. Examiners also like to see analysis of market penetration.
Fair-lending exams are also "the perfect time to promote CRA (Community Reinvestment Act) products," Mr. Marrinan said.
However, bankers need to make sure they can explain any discrepancies in pricing or marketing. Similarly, Mr. Marrinan said, banks have to account for inconsistencies among departments.
The fair-lending exam also provides an opportunity to brag about any personnel changes designed to meet fair-lending goals, such as diversity training or new hiring policies, he said.