Fair Housing Act Flashcards
In monitoring a bank’s compliance with the federal Fair Housing Act, it is LEAST relevant to review:
A. The bank’s financing of rental property
B. Handicap accessibility to property secured by a first mortgage loan made by the bank
C. The bank’s participation in advertising for the sale of housing in a community within the bank’s market area
D. The HMDA/LAR for the bank, if applicable, or, alternatively, the loan register for first mortgage loans generated by the mortgage department
B. Handicap accessibility to property secured by a first mortgage loan made by the bank
The Fair Housing Act provides it is illegal to discriminate on any prohibited basis in connection with a housing-related transaction, including a mortgage loan and advertising. Thus, financing rental property and participation in advertising housing sales are appropriate activities to review. So is reviewing the bank’s HMDA/LAR data, as this relates directly to housing-related lending activities. The characteristics of secured property, however, are not nearly as relevant to the purposes of the FHA.
The marketing department purchased new software that will allow them to post bank advertisements on Facebook. A department member sends the compliance professional a post that consists of one sentence of text and a picture of a house. Both the text and picture pertain to a residential real-estate-related transaction, but the post has no disclosures. What should the compliance professional do?
A. Add the text “Equal Housing Lender” with the house logo
B. Add the text “Equal Housing Lender”; the house logo is optional
C. The regulation does not mention social media, so it does not apply
D. There is no mortgage trigger term in the text, so it does not apply
A. Add the text “Equal Housing Lender” with the house logo
The Fair Housing Act requires that any dwelling-related promotional message contain the Equal Housing Lender logo (if written) and/or statement (if written or verbal). A written ad with a picture of a house conveys the message that the bank would provide dwelling-related credit, and since the ad is in writing (on social media), the logo and text are both required. The fact that the ad is in social media does not exempt the message from FHA requirements, and the FHA does not contain trigger terms.
First National Bank owns several pieces of real estate obtained through foreclosures. Two of these are homes that the bank would like to market and sell within the community. The bank will also provide financing for these homes. In addition, the bank owns an apartment complex that it is managing until it is sold. In relation to these properties, which of the following issues is NOT a FHA issue?
A. Discrimination based on familial status in renting apts.
B. Accessibility of the apt complex to handicapped persons.
C. Whether potential buyers of the houses are being discouraged from looking at the houses because of race or ethnic background
D. Affordability of the apts relative to the community immediately around the complex.
D. Affordability of the apts relative to the community immediately around the complex.
FHA covers all phases of real estate transactions. The bank is subject to the act as an owner and as a creditor in this example. The bank must be careful to ensure that potential apt tenants are not discriminated against on the basis that they have or are anticipated to have children under the age of 18. The bank must be careful to include the needs of handicapped persons in modifying or designing physical structures in the apt complex. When marketing the houses the bank should make sure that it or its real estate agents do not engage in illegal practices such as steering. The monthly rent on the apts themselves is not a FHA issue provided the rent on any one type of unit is charged equally to all persons regardless of race, color, national origin, sex, religion, familial status, or handicap of the person.
In state bank advertisements, on what must Fair Housing logos be placed?
A. Bank communications
B. Bank advertising
C. Advertising for home improvement loans
D. Bank lobby signs
C. Advertising for home improvement loans
State member banks: The Equal Housing Lender logo is required for written or visual advertisements related to dwellings.
First State Bank, a state nonmember bank, is auditing its recordkeeping procedures for compliance with the FDIC Fair Housing regulations. Which loan should be reviewed?
A. A loan to purchase a mobile home to be used as a vacation home
B. A HELOC
C. A loan to purchase vacant land for the construction of a residence.
D. A home purchase loan
D. A home purchase loan
The FDIC FH regulation covers only the home purchase loan and refinancings of purchase loans.
Which of the following loans is NOT subject to Fair Housing monitoring requirements for housing-related loans made by a national bank located outside a metropolitan statistical area (MSA)?
A. A loan to purchase a mobile home
B. A loan to provide permanent financing for the construction of a residence
C. A loan to purchase a residence
D. The refinancing of a home purchase loan
A. A loan to purchase a mobile home
Mobile home loans are not covered by the reg unless real estate on which the home will be placed is included in the financing.
First National Bank is located outside an MSA. It received 120 loan applications last year. Which statement best describes the bank’s Fair Housing recordkeeping requirements?
A. It may either keep the Home Loan Data System records, or it may keep the HMDA LAR info
B. It must complete up to 2,000 Home Loan Data Submission Forms per bank or 250 per decision center and submit them to the OCC within 30 days
C. It must keep a HMDA LAR
D. It must keep the Home Loan Data System records
A. It may either keep the Home Loan Data System records, or it may keep the HMDA LAR info
FNB does not receive enough loan applications to be covered by HMDA. If a bank is not covered by HMDA, it may choose to keep a HMDA LAR or it may keep the Home Loan Data System records, at its option.
Which of the following is NOT a prohibited basis of discrimination under the federal FHA?
A. Race
B. Disability
C. Religion
D. Sexual orientation
D. Sexual orientation
However, “Sex” is a protected basis and includes both gender identity and sexual orientation.
Who is covered under FHA?
Any person or entity engaged in real-estate related transactions
What are the 7 prohibited bases under FHA?
Race
Color
National origin
Religion
Sex (including gender identity and sexual orientation)
Familial status
Disability
Flying hats reveal clowns near rodeos, spreading funny delight.
Fair / Housing / Race / Color / National origin / Religion / Sex / Familial status / Disability
When must the fair housing logo be present on bank advertisements?
All written advertisements for dwelling-related products
Where must the Fair Housing Poster be displayed?
In the lobby where deposits are taken or loans made.
True/False: All savings associations must have clearly written, nondiscriminatory loan underwriting standards. These are not required to be available to the public on request at each office.
False. They are required to be available on public request at each office. Additionally, savings associations must inform inquirers of their right to receive a copy of the association’s underwriting standards.
True/False: All savings association underwriting standards and businesses practices that implement them must be reviewed annually to ensure equal opportunity in lending.
True
What must savings associations do when someone:
- Makes an application for a loan or other service?
- Requests forms or papers to be used to make an application for a loan or service?
- Inquires about the availability of a loan or service?
Associations must inform each inquirer of his or her rights to file a written loan application and receive a copy of the association’s underwriting standards.
