FAIRFAX, Va., Feb. 15, 2012 -- Fair Lending compliance presents an increasingly important challenge for banks and mortgage companies. The PrimeLending (a PlainsCapital company) settlement presents one of the most prominent, recent examples of this challenge. To help lenders, ADI Consulting is engaged in a joint effort with AIIZ Compliance Consulting, Inc. of Prosper, Texas.
Lenders of all sizes face intense scrutiny on Fair Lending compliance. Among other problems, PrimeLending had a weak Compliance Program. That Program did not provide sufficient controls or give management adequate insight into the firm's compliance position. As a result of these weaknesses, PrimeLending agreed to pay injured borrowers $2 million and to provide other forms of assistance. PrimeLending is a very large mortgage lender, but all other lenders face the same compliance challenges.
ADI and AIIZ give lenders unparalleled expertise and experience for meeting their Fair Lending compliance needs. ADI has more experience with relatively large lenders, whereas AIIZ's practice has focused on smaller lenders. "Together, our firms cover the whole spectrum," said Mike Mitchell, President of ADI. "We can deliver the services major, national lenders expect, and we've been doing that since 1993. AIIZ knows better than we do, what community bankers need, both in the Dallas Metroplex and in Texas generally. Debbie has been a key part of the Dallas bank compliance community for many years."
Through this initiative, ADI will provide technology and statistical analysis solutions. AIIZ will provide advice on compliance programs and on manual file review efforts. Each firm will supplement the other when demand requires.
ADI was established in 2002 and offers a menu of Fair Lending expertise. The menu includes sophisticated data analysis, including multi-variate regression analysis, as well as Fair Lending compliance software from RATA Associates. ADI's services also encompass all other facets of Fair Lending compliance. "Our Fair Lending services have been tested at some of the largest lenders in the country, reviewed by regulators, retained by leading law firms, and vetted by a 'Big 4' accounting firm."
AIIZ Compliance Consulting, Inc. (AIIZ) is a professional services firm focusing on bank regulatory compliance matters, and it has provided Fair Lending services for many years. More specifically, A II Z provides Fair Lending risk assessments, manual file testing, training and consultation represent an increasingly large part of its business. Debbie Ray is a former regulator and an ABA-published compliance author.
"With many lenders, Federal and State regulators are using regression analysis to assess their Fair Lending performance. Prudent compliance practices suggest that lenders should do the same, monitoring their risks and mitigating them before regulators begin their scrutiny. Other lenders do not have the volumes that would make regression the ideal solution, but can benefit from other effective statistical and technological approaches. Manual file testing in many instances is simply too labor intensive and costly for the client," explained Debbie Ray, the President of AIIZ. "That's why we are pleased to announce that we are partnering with ADI to cover the whole range of Fair Lending tools and services.
"Yes. One of the best tools for Fair Lending compliance in small to mid-size lenders is RATA Comply™ Fair Lending," said Mike Mitchell. "It can be very effective in targeting higher risk areas of a lender's performance, enabling Comparative File Reviews to be focused on the files that need attention. As with all of our services, we deliver a risk-based approach, which is exactly what regulators want lenders to do."
"Mike and I have known each other for ten years now and have worked with one another in a variety of roles in this hot area of potential litigation, enforcement actions, and monetary penalties known as Fair Lending. We have a good arrangement that should benefit my clients in both expertise and in cost-effectiveness." Additionally, where client needs dictate a greater team of experts, the two firms will benefit from the ability to leverage resources to provide experienced review teams to meet those demands
"I'm very excited about this joint initiative. It's a natural fit for my company to remain abreast of regulatory expectations and continue to serve my clients in the most expert and cost-effective manner."