Fair Lending, CRA & HMDA Consulting

Fair lending compliance and HMDA data integrity are among the highest-risk areas for mortgage lenders and depository institutions. Regulatory enforcement around the Equal Credit Opportunity Act, Fair Housing Act, Community Reinvestment Act, and Home Mortgage Disclosure Act has intensified in recent years, with agencies using increasingly sophisticated analytics to identify potential discrimination.

Arq Advisory’s founder led fair lending examinations as a CFPB Senior Commissioned Examiner and served as a Subject MAtter Expert on a large fair lending remediation Consent Order for Fintechs and their sponsor bank partner, giving our team direct insight into how regulators analyze lending data, identify disparities, and assess institutional fair lending risk management.

Arq conducts fair lending risk assessments that evaluate lending policies, underwriting criteria, pricing structures, exception practices, and marketing and outreach for potential discriminatory impact. We assess risk across all prohibited bases under ECOA and the Fair Housing Act, and we evaluate whether institutions have adequate fair lending monitoring, testing, and governance in place.

We perform HMDA Loan Application Register (LAR) data analytics — testing for data accuracy, completeness, and reportability compliance. Our testing surfaces data quality issues before regulators do and evaluates whether HMDA-reportable transactions are being properly identified, recorded, and submitted. We also analyze HMDA data for fair lending risk indicators, including denial rate disparities, pricing differentials, and geographic lending patterns.

Arq conducts statistical testing and comparative file reviews to identify potential disparate impact and disparate treatment in lending decisions. This includes regression-based pricing analysis, matched-pair testing methodologies, and underwriting override and exception analysis.

We support Community Reinvestment Act compliance through CRA performance evaluations, assessment area analysis, and strategic planning for lending, investment, and service activities. Arq helps institutions align CRA strategies with community needs while maintaining strong compliance documentation.

Arq develops fair lending compliance programs, including policy frameworks, monitoring and testing plans, and board and staff training. We help institutions build fair lending governance structures that demonstrate proactive risk management to examiners.

Arq Advisory works with banks, credit unions, mortgage lenders, fintechs and their legal counsel on fair lending, HMDA, and CRA compliance.