[Code of Federal Regulations]

[Title 24, Volume 1]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR100.143]



[Page 669-670]

 

                 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 670]]



    (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]