Fair Lending – Assessments on Risk and Performance

Presented by: Andy Zavoina, Rick Freer and Calvin Hagins



Fewer loans are being closed now than in the past years. We know production is lower. Credit is tighter because of property values, income, job stability and other factors. But do you know why your production is lower? Fair lending risks are an issue today as this applies to new loan requests as well as workouts and refinance requests from your existing borrowers.

Can you discriminate on loans? Absolutely, but you may not consider any prohibited bases. Using a sports analogy, a good offense is a good defense. So defend yourself by knowing that your policies and procedures are adequate, and are being followed.

This program will give you the opportunity to hear from regulators as to what they are seeing, what are the violations, what are the best practices, what are the disturbing trends and how you can recognize, manage and measure risk. We'll also discuss ongoing monitoring techniques and wrap this up with what your board should be hearing to know your program is on top of fair lending.

Some of the issues that will be discussed include:

• What a risk assessment is and why it is important
• Technical compliance with fair lending today under Reg B and Fair Housing
• Fair lending risk assessment coverage, it is more than new loans and includes all loan products and services, collections, advertising and more
• The OCC's fair Lending risk perspective
• How you can identify fair lending risk
• How you can measure this risk
• How fair lending risk is controlled and what monitoring steps make sense for your bank
• What you should be telling your board about your fair lending program

About the Speakers: Andy Zavoina, CRCM, is a consultant with the Glia Group, best known for its involvement with BankersOnline.com.

Andy has been in finance and banking for 22 years. Over 20 years were with a holding company with two Central Texas community banks that had $534 million in assets, 89 branches spanning Texas and nearly 500 ATMs. After starting in loan workouts, Mr. Zavoina has been a consumer, commercial and real estate lender and managed those departments as well as being the banks first Webmaster. He was responsible for compliance, management, auditing, and training for both banks.

Andy is a past Chairman of the American Bankers Association's Compliance Executive Committee. He was the 2003 recipient of the American Bankers Association's Distinguished Service Award for his involvement and accomplishments in the field of regulatory compliance management. He currently serves on the Editorial Advisory Board for the ABA's Compliance Magazine, Compliance Action magazine, is a member of the ABA's Compliance School Board and is a BankersOnline Guru. He also served on the Texas Bankers Association's Compliance Committee.

He is a graduate of the ABA National Commercial Lending School, National Compliance and National Graduate Compliance School and is a Certified Regulatory Compliance Manager with the Institute of Certified Bankers. He has written numerous articles and lectured on compliance, the use of the Internet and technology as a tool, as well as compliance in cyberspace to local, state and national associations. Internet policies and other compliance related programs are made available on his personal Web site.

Calvin R. Hagins was appointed Director for Compliance Policy for the Office of the Comptroller of the Currency (OCC) in October 2005.

In that position, he plans, organizes, implements, and directs activities associated with identifying risks. He also provides guidance on policy issues affecting the compliance process and consumer policies.

From March 2003 through September 2005, he served as Senior Advisor to the Deputy Comptroller for Compliance Policy where he served as an expert on the formulation and implementation of a broad range of policies and procedures relating to the efficient and effective supervision of compliance risk.

From March 1999 through March 2003, he served as the Assistant Deputy Comptroller – Compliance and provided technical expertise and guidance to the Southeast District’s midsize and community banks on all aspects of consumer compliance, CRA, fair lending, and Bank Secrecy Act/Anti-money Laundering activities.

Prior to serving as Assistant Deputy Comptroller, he served as a national bank examiner in the Compliance Cadre from 1994 to 1999. During that period, Mr. Hagins was active in developing and instructing in the National Basic Consumer Compliance School, the National Fair Lending School, and the National CRA School.

Mr. Hagins joined the OCC in 1987 and was commissioned a national bank examiner in 1993. He holds a bachelor’s of science in finance from the University of South Florida in Tampa.

Rick Freer has served since July 2000 as a national bank examiner in the Compliance Policy Division of the Office of the Comptroller of the Currency (OCC). He handles compliance regulations, including fair lending, UDAP, and HMDA, compliance risk management initiatives, and training activities. Mr. Freer is an active member for the ABA National Compliance Schools Advisory Board and facilitates various classes at the schools. He also serves on the ABA Editorial Advisory Board and writes articles for the ABA Compliance Magazine. Mr. Freer joined the OCC in 1969 as an assistant national bank examiner. He was commissioned a national bank examiner in 1976. From 1976 through 1978 he served as a regional training officer and regional director for the Human Resources Division. From 1978 through 1990, he held various positions in the OCC's Washington office: Special Project Coordinator in the Chief National Bank Examiner's Office; National Recruitment Coordinator and associate director in the Human Resources Division; and acting deputy director in the Training and Development Division. From 1990 through 1997, he was director for Compliance Management and handled CRA and fair lending examination programs, consumer complaints, and compliance training and administrative programs. In 1997, Mr. Freer joined the OCC's Resource Cadre. He was a senior internal consultant and participated in such tasks as CRA and compliance appeals with the OCC's Ombudsman's Office, large bank CRA exams, and the development of examiner recruitment training, the OCC's contract examiner hires program, and examination handbooks and policy positions for the Community and Consumer Policy Unit.


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CD-ROM Includes:

• Complete presentation (including slides and audio)
• Written Materials
• Follow-up Q & A

You have the right under this license agreement for this CD-ROM to use this presentation on a single-workstation. Use on a network is in violation of the copyright agreements. CD may be used by multiple users at a given institution but may not be placed on a network or in any other multi-user environment.

This program was recorded in its entirety in February 2010. The CD-ROM includes program slides, materials (if available) and follow-up Q & A document.