To quote a great American philosopher (and pretty good baseball player and manager), Yogi Berra, in the Fair Lending world, “It is deja vu all over again.” Insofar as recently there has been a multiyear break from aggressive use of disparate impact as a tool for rigorous Fair Lending enforcement by federal banking and enforcement agencies, that “break” clearly is over. Moreover, the Covid-19 hangover on the financial wherewithal of the most vulnerable consumers is only just beginning and the Biden Administration and its appointees are laser-focused on ensuring that protected class members who are a disproportionately large cohort in this group are not treated unfairly by creditors.
As someone who has spent 30 years professionally engaged as a legal advisor and business leader in financial services with a focus on Fair Lending, it became clear to me several years ago that regulators increasingly must rely on data and quantitative analytics tools as an initial triage step in determining how to allocate scarce regulatory resources to identifying Fair Lending problems. Lenders should be using similar tools to understand their own performance pursuant to standard Fair Lending metrics and address deficiencies where possible. This is true not only for the historical focus on mortgage lending, but also for all other forms of consumer lending including auto lending, student lending, and unsecured consumer lending.
Being an entrepreneur and an industry participant uniquely aware of the costs to a lender of being targeted for Fair Lending examination and enforcement, I decided to expand my business portfolio in 2016 by partnering with my good friend Anurag Agarwal to transform his already market-leading Risk Exec Fair Lending analytics tool for the mortgage industry to a user-friendly, affordable state-of-the-art Fair Lending analytics tool applicable well beyond the mortgage space to every consumer lending product. As we enter this new challenging era, Anurag and I believe Risk Exec now is that tool and our subscribers seem to agree. Proud to share this announcement on recent Risk Exec enhancements and market penetration and invite all with a professional interest in the fair lending space to demo this amazing advance in Fair Lending analytics.