Fair Lending Practices
We work with lenders who respects the borrowers and don't perform any abusive actions!
THE BEAR protects consumers from predatory lenders and unfair debt collection practices!
Fair Lending Basics
Fair lending stands for unbiased treatment on behalf of the crediting institutions of all clients. Lenders must conduct their business fairly and equally to all consumers. They should not differ borrowers in any aspect based on certain characteristics. To do that lenders need to follow the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA).
The ECOA and FHA offer protection to clients from discrimination based on:
- – religion;
- – race;
- – color;
- – nationality;
- – marital status;
- – family or marital status;
- – sex;
- – age;
- – handicap
The Act also bans distinction based on income coming from a public aid program or the customer’s exercise in good faith within the Consumer Credit Protection Act. The Fair Housing Act fights discrimination in transactions related to residential real-estate.
NO Predatory Lending
The laws prohibit predatory lending. This practice involves abusive and illegal terms on borrowers, forcing them to accept unfair terms. The lender has an unethical and illicit behavior and forces the clients to enter into binding agreements.
Here are some examples of predatory lending methods:
- – poor disclosure of term and conditions;
- – high fees with no reason;
- – unfair and tricky practices;
Fair lending regulations may cause disparate impact and treatment. Disparate impact occurs when a lender’s policy has an uneven effect on its customers. This might be the case of not providing single family home loans for less than a certain sum of money. Disparate impact occurs unintentionally. Disparate treatment, on the other hand, occurs on purpose. The lender treats people differently based on features protected by law. This may be the case when the sums lent to borrowers vary based on their age.
Fair Debt Collection
Fair lending practices involve fair debt collection. The Fair Debt Collection Practices Act governs debt collection practices at the federal level. Each state has its local laws banning abusive debt collection actions. Illegal debt collection may occur when:
- – A collector is pretending to be a state agency or attorney;
- – A collector is illegally threatening with a law suit;
- – Using any harmful, oppressive, foul or harassing language or tactics in order to collect debt;
- – Attempting to contact debtors before 9 a.m. or after 8 p.m. in their local time zones;