[Code of Federal Regulations]
[Title 24, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR100.143]

[Page 655-656]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
    CHAPTER I--OFFICE OF ASSISTANT SECRETARY FOR EQUAL OPPORTUNITY, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 100_DISCRIMINATORY CONDUCT UNDER THE FAIR HOUSING ACT--Table of Contents
 
Subpart C_Discrimination in Residential Real Estate-Related Transactions
 
Sec. 100.143  Appropriate corrective action.

    (a) The report or results of a self-test are privileged as provided 
in this subpart if the lender has taken or is taking appropriate 
corrective action to address likely violations identified by the self-
test. Appropriate corrective action is required when a self-test shows 
it is more likely than not that a violation occurred even though no 
violation was adjudicated formally.

[[Page 656]]

    (b) A lender must take action reasonably likely to remedy the cause 
and effect of the likely violation and must:
    (1) Identify the policies or practices that are the likely cause of 
the violation, such as inadequate or improper lending policies, failure 
to implement established policies, employee conduct, or other causes; 
and
    (2) Assess the extent and scope of any likely violation, by 
determining which areas of operation are likely to be affected by those 
policies and practices, such as stages of the loan application process, 
types of loans, or the particular branch where the likely violation has 
occurred. Generally, the scope of the self-test governs the scope of the 
appropriate corrective action.
    (c) Appropriate corrective action may include both prospective and 
remedial relief, except that to establish a privilege under this 
subpart:
    (1) A lender is not required to provide remedial relief to a tester 
in a self-test;
    (2) A lender is only required to provide remedial relief to an 
applicant identified by the self-test as one whose rights were more 
likely than not violated;
    (3) A lender is not required to provide remedial relief to a 
particular applicant if the statute of limitations applicable to the 
violation expired before the lender obtained the results of the self-
test or the applicant is otherwise ineligible for such relief.
    (d) Depending on the facts involved, appropriate corrective action 
may include, but is not limited to, one or more of the following:
    (1) If the self-test identifies individuals whose applications were 
inappropriately processed, offering to extend credit if the applications 
were improperly denied; compensating such persons for any damages, both 
out-of-pocket and compensatory;
    (2) Correcting any institutional policies or procedures that may 
have contributed to the likely violation, and adopting new policies as 
appropriate;
    (3) Identifying, and then training and/or disciplining the employees 
involved;
    (4) Developing outreach programs, marketing strategies, or loan 
products to serve more effectively the segments of the lender's market 
that may have been affected by the likely violation; and
    (5) Improving audit and oversight systems to avoid a recurrence of 
the likely violations.
    (e) Determination of appropriate corrective action is fact-based. 
Not every corrective measure listed in paragraph (d) of this section 
need be taken for each likely violation.
    (f) Taking appropriate corrective action is not an admission by a 
lender that a violation occurred.

[62 FR 66432, Dec. 18, 1997]