Fair Lending Policy and Loan Policy

Fair lending laws are designed to provide fair and equal access to credit, based on individual creditworthiness, without regard to a prohibited basis such as race, gender, or national origin. The fair lending policies and procedures should clearly state how the credit union will comply with fair lending laws and enable the credit union to serve the entire field of membership.

The board of directors and senior management will need to understand and convey to all credit union staff they are responsible and accountable for complying with fair lending laws and regulations. Policies and procedures concerning the approval of credit, loan underwriting, pricing, and servicing standards need to be clearly written and understood. Fair lending training should be provided for all credit union employees and officials involved in the lending process. Include training for employees who take applications, originate loans, service loans, and collect delinquent loans. Additionally, the supervisory committee and any internal audit staff should incorporate an assessment of compliance with the credit union’s fair lending policies as a component of their review procedures.

Loan policies need to identify the type of lending programs to be offered in the first two years of operation. Specifically, policies should describe the type of loans, dollar limitations, terms and interest rates, maturity, collateral and insurance requirements, and other issues within each lending program. State the factors and parameters (such as credit standards) for processing a loan within each lending program.

Ensure the loan policies address compliance with the appropriate consumer lending regulations, including:

• Truth-in-Lending Act (Regulation Z)

• Equal Credit Opportunity Act (Regulation B)

• Fair Credit Reporting Act (Regulation V)

More advanced lending products, such as mortgage loans, will require compliance with the Real Estate Settlement Procedures Act (Regulation X), Fair Housing Act, and the Home Mortgage Disclosure Act (Regulation C), among other requirements.

Review the following NCUA’s regulations pertaining to loans or loan-related matters:

• § 701.21, Loans to members and lines of credit to members

• § 701.22, Loan participations

  • Letter to Credit Unions 13-CU-07, Loan Participation Waivers

• § 701.23, Purchase, sale, and pledge of eligible obligations

• § 701.31, Nondiscrimination Requirements

• Part 717, Fair Credit Reporting

• Part 722, Appraisals

• Part 723, Member Business Loans; Commercial Lending

• Part 760, Loans in Areas Having Special Flood Hazards

• Part 761, Registration of Residential Mortgage Loan Originators

Additional guidance on lending matters can be found under NCUA’s Letters to Credit Unions and Other Guidance section of NCUA's website.

Last updated on March 30, 2026