News Release 1996-45 | April 19, 1996

OCC Summarizes Results of Fair Lending Pilot Testing

WASHINGTON, D.C. — The Office of the Comptroller of the Currency (OCC) today issued a report summarizing the results of its pilot program to assess the use of "testers" to identify fair lending violations at national banks.

"Matched pair tests were conducted at eight national banks and no violations of fair lending laws were detected," said Bert Otto, Acting Deputy Comptroller for Compliance Management. "Based on the pilot experience, we've concluded that matched-pair testing can be a valuable tool to use in certain situations in the agency's overall fair lending program."

The OCC launched its pilot testing program in July 1994 to assess whether national banks and their mortgage subsidiaries treated consumers of different races and nationalities similarly during the pre-application phase of the mortgage process. In addition to actual testing, the OCC examined and evaluated testing processes currently in use by other regulatory agencies, fair housing organizations, mystery shopping vendors and others who had experience with matched-pair testing.

Going forward, the OCC will consider further use of testing on a case-by-case basis when an evaluation of information from examiners, consumers or the media indicates that a bank may be engaging in illegal discrimination in the pre-application stage. The agency also has encouraged national banks to conduct fair lending self-assessments. Self-assessments include both self-evaluations of information contained in loan files and self-tests at the pre-application stage of the loan process. Interim guidelines on self-assessments were sent to national banks in OCC Bulletin 95-51, dated September 15, 1995.

"A significant benefit of our fair lending pilot testing program is that the agency now can assist national banks in developing their own self-testing programs," Otto said.

The report summarizing the OCC's fair lending pilot testing program accompanies this news release. The document is also available on the agency's Internet website, found at http:\\, or it may be obtained by fax from the OCC Information Line at (202) 479-0141 document number 79645.

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