Category: blog

All banking professionals are familiar with the acronym CAMELS (Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Sensitivity), the risk rating system used by bank regulators.  HMDA data can play a role in this rating system.  Specifically, I’d like to focus on the “A”, Asset Quality.  Using HMDA data, we can uncover the unknown risk factors…

The August 31, 2018 HMDA rule helped clarify the 2018 reporting requirements for banks and credit unions that are minor players in the mortgage market. However, this rule could adversely affect the rate spread data used in fair lending pricing analysis. Rate spread is the difference on a consumer loan between the APR and the…

The MBA’s Regulatory Compliance Conference is taking place from September 16th to 18th in Washington, DC. Anyone working to implement the new regulations—including compliance officers, company executives, and policy advisors—should attend this event because this is a great opportunity to hear first-hand from federal regulators and policy makers. ComplianceTech is one of the sponsors of…

On August 16, the Federal Financial Institutions Examination Council (FFIEC) released 2018 median family income (MFI) statistics for metropolitan areas to be used in fair lending and CRA analysis.  This blog presents some interesting discoveries when comparing 2018 to 2017 MFIs. (The 2018 MFIs are live in Fair Lending Magic™ and will be live in…

In order to thrive in the lending business, you need to identify market opportunities, formulate lending benchmarks, and adopt lending best practices. While all these tasks can be challenging, ComplianceTech can help you make them simpler thanks to our software products: LendingPatterns™ and Fair Lending Magic™. We’ve been helping companies of all sizes since 1992,…

Defining HMDA peer groups is critical for fair lending benchmark performance evaluation.  I’m often asked, “How do regulators define a peer group?”  Regulators don’t define peer groups; they offer guidance.  For example, they expect lenders to know who their competitors are in their primary lending areas.  See below for links to CFPB and FRB guidance.…

Each year, the FFIEC releases a list of Distressed and Underserved Nonmetropolitan Middle-Income Census Tracts (link).  Community Reinvestment Act guidance (see, for example, this link) illustrates the emphasis that bank regulators place on these tracts.  As a lender, you might be interested in learning more about the current lending activity in these census tracts.  In…

Much has been written in this blog about the use of LendingPatterns™ in uncovering loan production opportunities (for example, here).  Within metro areas, activity levels can change so drastically over time that you need a fast and easy way to create trend analysis. Curious LendingPatterns™ users, especially those researching performance context for Community Reinvestment Act self-assessments,…

All lenders in the home mortgage lending business want to make more loans. That’s why they are in business.  Many lenders do a good job planning and executing outreach strategies to make loans to everyone.  However, some lenders do a better job than other lenders in making credit available to underserved borrowers. As a retail…

In LendingPatterns™ there are two methodologies to determine statistical evidence of redlining.  Both approaches use the z-test, the standard test to determine whether differences in proportions are statistically significant.  The p-value output from the z-test gets at the probability that redlining occurred.  LendingPatterns™ makes it easy: we highlight in bright yellow statistical evidence of redlining…