Robert Maddox Quoted on Importance of Local Banks' Attention to Detail Regarding Fair Lending Compliance

Bradley partner Robert Maddox was quoted in the Birmingham Business Journal regarding fair lending compliance in local banks.

Maddox noted that regulators are increasing their focus on fair lending and said, “Based upon what we’re seeing not only with the work that we’re doing with banks across the country, but also with some of our other clients and colleague law firms across the country, we’re seeing an uptick in what we understand are supervision(s) and examination(s) focusing on fair lending.”

As a result, Maddox said Bradley is anticipating an uptick in fair lending enforcement actions. Fair lending laws relevant to the topic include the Equal Credit Opportunity Act, Home Mortgage Disclosure Act (HMDA), Fair Housing Act and Community Reinvestment Act, which were all passed in the 1970s. “All of those have come forward in the 21st century and have a lot more teeth to them, if you will, from a consumer perspective,” he explained.

Maddox said every bank would benefit from a strong understanding of its HMDA data to avoid problems arising from fair-lending law enforcement. “It’s just really good data as to what your lending activity looks like from a statistical level, and that’s the same data that the Department of Justice is using,” Maddox added.

Maddox said it’s important for banks to be able to show why their lending patterns may look a certain way in given areas. For instance, a smaller financial institution may not be able to compete with big banks offering subsidized lending in a given municipality. “(In) one municipality or one jurisdiction or one MSA, you may not have the level of penetration that you think you might have. But you’ve got to understand why,” he said.

The full article, “What local banks need to know about growing fair lending security,” was published by Birmingham Business Journal on June 28, 2023.