Question: How do the fair lending laws impact a minority-owned institution given its special mission and targeted market?
Answer: Minority-owned institutions must remember that a lender can not serve targeted markets at the expense of the community at large. For example, the institution cannot offer more favorable credit terms to African Americans based solely on the fact that they are African American. As is the case with all financial institutions, a minority-owned institution’s underwriting criteria must be applied consistently for all applicants. Another point to remember is that a lender may not use advertising that does not reflect the demographics of the entire community. For example, images highlighted in advertisements must be reflective of the entire community and not just the institution’s targeted market.