OCC Fines Mortgage Lender for Fair Housing Act Violations

On March 19, 2019, the Office of the Comptroller of the Currency (OCC) announced that it had entered into a Consent Order with a major mortgage lender over allegations that the lender did not adequately ensure that its relationship loan pricing program was offered to all eligible customers, resulting in adverse effects on customers on the basis of race, color, national origin, and/or sex in violation of the Fair Housing Act (“FHA”),  42 U.S.C. § 3601-19, and its implementing regulation, 24 C.F.R. Part 100.

According to the OCC, the lender’s relationship loan pricing program offered credits to closing costs and interest rate deductions to customers who had a qualifying banking relationship with the lender and applied for the program. From approximately 2011 to 2015, the lender allegedly failed to train its loan officers on how to offer the program to qualifying borrowers and did not require or oversee that loan officers did so. The lender discovered the allegedly inadequate controls and self-reported its findings to the OCC in 2015. The OCC found that as a result of these practices, some borrowers did not receive the program’s benefits to which they were eligible, adversely affecting them in violation of the FHA.

The Consent Order requires the lender to pay a civil fine of $25,000,000, and the lender will also provide reimbursement to approximately 24,000 borrowers totaling​ approximately $24,000,000. The lender has also taken remedial actions to prevent future violations.