BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C.  20551

DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS

CA 04-8
Supersedes CA 99-1

October 26, 2004

TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS SECTIONS:

SUBJECT: Revised FFIEC Fair Lending Examination Procedures

The Board adopted several changes to Regulation B that became effective April 15, 2004. One of those changes, the creation of an exception to the general prohibition against inquiring about, or noting, applicant characteristics for nonmortgage credit transactions for the purpose of conducting a self-test, resulted in the need to revise the FFIEC fair lending examination procedures.

The "Compliance Management Analysis Checklist" and the "Streamlining the Examination" sections in the Appendix were updated to provide guidance in situations in which a bank has chosen to collect monitoring information on non-HMDA loans for the purpose of a self-test (as defined by Regulation B). In addition, the portion of the "Credit Scoring Analysis" section in the Appendix that discusses the use of age in a credit scoring system was revised to improve the clarity of the discussion. System guidance regarding alternative fair lending procedures in low risk banks (CA 01-4) remains unchanged and in force.

The revised procedures are attached to this letter. Please distribute them to your examination staff for immediate use. If you have any questions about this information, please contact the review examiner assigned to your district.

Sincerely,
(signed)

Shawn McNulty
Associate Director

Attachments

Attachment - Interagency Fair Lending Examination Procedures (120 KB PDF)
Attachment - Interagency Fair Lending Examination Procedures Appendix (89 KB PDF)