BB 92-17
BANKING ISSUANCE

Comptroller of the Currency
Administrator of National Banks
Type:  Banking Bulletin
Subject:  Guide to Fair Mortgage Lending

TO:	The Chief Executive Officers and Compliance Officers of All National
     Banks, Deputy Comptrollers, Department and Division Heads, and all
     National Bank Examiners

Attached is a Federal Financial Institutions Examination Council (FFIEC)
pamphlet entitled "Home Mortgage Lending and Equal Treatment."
 
The pamphlet outlines a preventive approach for financial institutions to
help ensure their compliance with the Equal Credit Opportunity Act (ECOA)
and the Fair Housing Act (FHA). It should assist financial institutions in
performing self-assessments to ensure that no unlawful policies,
procedures, or standards exist. The pamphlet's aim is to make home
mortgage lenders aware of the possible unintended consequences of policies
and practices.
 
Topics discussed in the pamphlet as possible sources of unlawful
discrimination are:

* Policies, procedures, and underwriting standards that are assumed,
  without justification, to be necessary and that have disproportionate
  effects along racial lines.

* Ambiguous and subjective lending criteria.

* Waiving standards, granting exceptions to standards, and adjusting
  standards.

* Interpreting certain secondary market standards as inflexible. (The
  Federal Home Loan Mortgage Corporation's Seller-Servicer Bulletin 92-2,
  issued in January 1992, clarifies a number of Freddie Mac's underwriting
  standards to remove the potential for such misinterpretation.)

* Dealings with appraisers, realtors, and private mortgage insurance
  companies.

The Office of the Comptroller of the Currency (OCC), as a member of the
FFIEC, recommends the use of this pamphlet. The pamphlet does not,
however, state OCC policy or mandate particular approaches or initiatives
by lenders for avoiding discrimination in home mortgage lending. Examiners
will continue to base their determinations of compliance with ECOA and FHA
on the presence or absence of unlawful discrimination and on the lender's
performance of statutory procedural requirements, rather than on the
degree to which a lender has implemented recommendations in the pamphlet.

The pamphlet may be reproduced without restriction. A camera-ready copy of
the pamphlet is also attached.






Stephen R. Steinbrink
Acting Comptroller of the Currency

Attachments




Date:  March 31, 1992