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History Gives Us a Chance to Do Better

Nov 06, 2019
Financial Institutions

“Those that fail to learn from history, are doomed to repeat it.” Winston Churchill 

It was in June 1991 that my wife and our two children took a trip to Atlanta, Georgia, for two purposes. One was to visit and spend time with our former associate pastors and their children who had moved to Atlanta from Sterling, Illinois. The second purpose was for me to attend my first American Bankers Association Regulatory Compliance Conference (it was ABA’s fifth such conference). Among the topics to be included in the conference were Regulatory Enforcement Trends, Strategic Planning for CRA, What’s Happening in Deposit Compliance, How to Train for Compliance, How to “Sell” Compliance, BSA, New Requirements, Management Problems and many more.

Atlanta was in the compliance news as a result of a series of Pulitzer Prize-winning articles published by The Atlanta Journal/The Atlanta Constitution in May 1988 called “The Color of Money,” disclosing lending practices that evidenced discrimination against blacks. http://powerreporting.com/color/color_of_money.pdf

One of the major factors of the analysis in the articles was where Atlanta’s black neighborhoods were and where banks rarely loaned money. The articles ranked banks and savings and loan institutions on black vs. white loans and on lending to black and/or low-income neighborhoods. The articles also focused on locations of bank and S&L branches in areas less than 50% black compared with areas more than 50% black. There were even references to the impact of minimum loan amounts.  

Fast forward to the 21stcentury. When one looks at the fair lending settlements in the past five year, the allegations are startlingly similar to the allegations made 31 years ago. The fair lending risks identified in the first decade after the Atlanta articles are the same fair lending risks we see today regarding the treatment of protected classes. Many of today’s lenders might not have been born when this occurred in Atlanta, which may be the cause of the recent enforcement actions on the same topic. Fair lending laws have not changed, but we still see the same issues resurface decade after decade. Don’t let history repeat itself at your institution; we at Wipfli remember the past and can help you navigate fair lending risk in the present. We can assist by analyzing your financial institution’s fair lending risks, measuring your performance and helping you do better in a cost-effective way, allowing you to meet the letter and intent of the fair lending laws of the land today and in the future.

Email Melissa Blaser at mblaser@Wipfli.com or Kathy Enbom at kenbom@Wipfli.com to begin doing better.


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