NCUA Q&As – Is a credit union subject to fair lending laws if its loans are processed by a third party lender?

Compliance > Lending > Fair Lending
Q:   Is a credit union subject to fair lending laws if its loans are processed by a third party lender?  
How can a credit union ensure that a third party processor meets the fair lending requirements?
 
A:  Yes, fair lending laws apply to all financial institutions involved in any type of lending activity.  Credit unions using third-party loan processors must still understand and comply with fair lending laws as they apply to other aspects of the lending process including, advertising and marketing, responding to public questions, and posting required signage.  
 
Federal credit unions using third-party processors should review and follow the due diligence requirements discussed in Letter to Credit Unions 01-CU-20, dated November 2001, Letter to Credit Unions 08-CU-19, dated August 2008, and Letter to Credit Unions 10-CU-15, dated August 2010.
 
 
ADDITIONAL INFORMATION:
This Q&A was obtained from NCUA’s website, in a document entitled “NCUA Fair Lending Examination and Compliance Program for Federal Credit Unions,” which may be found here: 
 

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