To address the concerns that some minority consumers and small business owners are experiencing discrimination by lenders, federal bank regulators issued a joint letter on May 27, 1993, urging special attention to 11 specific lending activities.
A copy of the suggested 11 fair lending activities follows:
1. Use of an internal second review system for consumer, mortgage and small business loan applications that would otherwise be denied.
2. Enhanced employee training that engenders greater sensitivity by financial institution management, and employees, to racial and cultural differences in our society.
3. Training of loan application processors to assure that any assistance provided to applicants in how to best qualify for credit is provided consistently to all loan applicants.
4. Efforts to ensure that all persons inquiring about credit are provided equivalent information and encouragement.
5. Use of flexible underwriting and appraisal standards that preserve safety and soundness criteria while responding to special factors in low- and moderate-income and minority communities.
6. Efforts to encourage equal employment opportunity at all levels throughout the institution, including lending, credit review, platform and other key positions related to credit applications and decisions.
7. Affirmative marketing and call programs designed to assure minority consumers, realtors, and business owners that credit is available on an equitable basis; marketing may involve sustained advertising programs covering publications and electronic media that are targeted to minority audiences.
8. Ongoing outreach programs that provide the institution with useful information about the minority community, its resources, credit needs and business opportunities.
9. Participation on multi-lender Mortgage Review Boards which provide second reviews of applications rejected by participating lenders.
10. Participation in public or private subsidy or guarantee programs that would provide financing on an affordable basis in targeted neighborhoods and communities.
11. Use of commissions or other monetary or nonmonetary incentives for loan officers to seek and make safe and sound consumer and small business loans in minority communities.
Form C-1 through Form C-10 can be found at the following link. https://www.fdic.gov/regulations/laws/rules/6500-260.html#fdic6500appendixctopart1002
Form C–1—Sample Notice of Action Taken and Statement of Reasons
Form C–2—Sample Notice of Action Taken and Statement of Reasons
Form C–3—Sample Notice of Action Taken and Statement of Reasons (Credit Scoring)
Form C–4—Sample Notice of Action Taken, Statement of Reasons and Counteroffer
Form C–5—Sample Disclosure of Right To Request Specific Reasons for Credit Denial
Form C–6—Sample Notice of Incomplete Application and Request for Additional Information
Form C–7—Sample Notice of Action Taken and Statement of Reasons (Business Credit)
Form C–8—Sample Disclosure of Right To Request Specific Reasons for Credit Denial Given at Time of Application (Business Credit)
Form C–9—Sample Disclosure of Right To Receive a Copy of Appraisals
Form C–10—Sample Disclosure About Voluntary Data Notation
REGULATION B ADVERSE ACTION FLOWCHART (Non-Business Credit)
(Click here to view Adverse Action Flowchart)