Fair Lending Policy
Presto Loan Centers, LLC.
Fair Lending Policy
This policy outlines Presto Auto Loans, Inc.’s approach to complying with any and all applicable fair lending laws and regulations, including for loans originated by third parties. This policy provides guidelines followed by PRESTO LOAN CENTERS, LLC. employees to ensure lending activities – during all stages of the lending process, including collection and repossession, as applicable – are conducted without regard to the applicant’s/borrower’s race, color, religion, national origin, sexual orientation, military status, sex, marital status, disability, familial status, age (provided the applicant has legal capacity to enter into a binding contract), receipt of public assistance, or the exercise of legal rights under the federal Consumer Credit Protection Act.
Presto Auto Loans, Inc. (“PRESTO AUTO LOANS, INC.” or the “Company”) is committed to providing the highest quality loan finance services to applicants and borrowers on an equal, non-discriminatory basis. It is PRESTO AUTO LOANS, INC.’s policy to treat its applicants and borrowers consistently and in compliance with fair lending laws throughout the loan process, including collection and repossession, as applicable. Presto Auto Loans, Inc.’s employees are required to offer assistance and services in a fair and consistent manner during the performance of their duties and responsibilities to potential applicants and borrowers without regard to race, color, religion, national origin, sexual orientation, military status, sex, marital status, disability, familial status, age (provided the applicant has legal capacity to enter into a binding contract), receipt of public assistance, or the exercise of legal rights under the Federal Consumer Credit Protection. Additionally, PRESTO AUTO LOANS, INC. informs its employees regarding the implementation of policies created to ensure compliance with fair lending laws.
II. Fair Lending Overview
The legal aspects of fair lending are contained in several federal and state laws. The purpose of these laws is to ensure that fair and equal treatment is provided to individuals seeking financing. The Federal Equal Credit Opportunity Act (“ECOA”) 3 and its implementing regulation, Regulation B 4, prohibit discrimination in a credit transaction. The prohibited bases of discrimination under the ECOA are the following: race; color; religion; national origin; sex; marital status; age (provided that the applicant has the capacity to enter a binding contract); the applicant’s receipt of income through a public assistance program; and the good faith exercise of the applicant of a right under the federal Consumer Credit Protection Various state laws also govern fair lending, which makes it an unlawful discriminatory practice for any creditor to discriminate against any such applicant because of the race, creed, color, national origin, sexual orientation, military status, age, sex, marital status, disability, or familial status of such applicant in the granting, withholding, extending or renewing, or in the fixing of the rates, terms or conditions of, any such credit; to use any form of application for credit or use or make any record or inquiry which expresses, directly or indirectly, any limitation, specification, or discrimination as to race, creed, color, national origin, sexual orientation, military status, age, sex, marital status, disability, or familial status; to make any inquiry of an applicant concerning his or her capacity to reproduce, or his or her use or advocacy of any form of birth control or family planning; to refuse to consider sources of an applicant’s income or to subject an applicant’s income to discounting, in whole or in part, because of an applicant’s race, creed, color, national origin, sexual orientation, military status, age, sex, marital status, childbearing potential, disability, or familial status; or to discriminate against a married person because such person neither uses nor is known by the surname of his or her spouse.
This policy applies throughout the loan process, including but not limited to, origination, loan servicing, refinancing, collection and repossession activity if applicable. Presto Auto Loans, Inc. is committed to implementing policies, procedures, employee training, and management oversight to ensure equitable treatment of borrowers. Presto Auto Loans, Inc.’s policies include responding to consumer inquiries, concerns, and complaints in a timely, fair, and consistent manner.
Presto Auto Loans, Inc.’s commitment to fair lending is reflected in its belief in the shared responsibility for compliance with fair lending laws at every level of the organization.
Presto Auto Loans, Inc.’s Senior Management is responsible for approving, adopting, implementing and ensuring that Presto Auto Loans, Inc.’s business practices comply with its Fair Lending Plan in the following ways:
(i) Communicating Presto Auto Loans, Inc.’s fair lending policies to the applicable management;
(ii) Allocating, on an ongoing basis, sufficient resources to ensure the successful implementation of this Plan;
(iii) Obtaining input and guidance from the Senior Management on significant business decisions that have potential fair lending impact; and
(iv) monitoring results and recommending corrective action where necessary.
The Compliance Department, led by Senior Management, or his/her designee, implements the policies outlined in this Policy in the following ways:
(i) Monitoring implementation of and adherence to the fair lending policies and procedures;
(ii) Reviewing and addressing fair lending complaints;
(iii) Monitoring, as appropriate, Presto Loan Centers, LLC’s loan application and underwriting process as well as its pricing policies;
(iv) Reviewing, on a regular basis, the Fair Lending Policy to determine that it still accurately reflects the policies followed by Presto Auto Loans, Inc. and conforms to federal and state law;
(v) Maintaining training materials to keep current with changes in the law, regulation, and judicial interpretation;
(vi) Providing, periodically, updates on fair lending issues to Presto Loan Centers, LLC. employees involved in the loan origination or servicing process.
Fair lending policies are applied in a manner that achieves the Company’s fair lending objectives while at the same time are applied in a manner which is consistent with making safe and sound quality loans.
Fair Lending Policy and Loan Process
Presto Loan Centers, LLC. is aware that the risk of unfair lending practices runs throughout the loan process.
Presto Loan Centers, LLC. is committed to implementing training policies that protect against discriminatory practices at every level of the loan process, from application to loan satisfaction, and to taking immediate corrective action should fair lending discrimination occur. If fair lending deficiencies are observed or appear in an employee’s job evaluation, the employee receives additional training or counseling in an effort to correct the deficiency. If the deficiency persists, the employee will be subject to more severe action, including termination.
It is the policy of Presto Loan Centers, LLC., before a loan is extended to an applicant, to consider the applicant’s ability to repay the loan, taking into consideration the applicant’s current and expected income, credit history, current obligations and employment status and to not base the decision on whether to extend credit to an applicant based on the applicants collateral or equity in the collateral without determining the applicants ability to repay the loan.
In accordance with the Federal Equal Credit Opportunity Act, Presto Loan Centers, LLC. employs business practices that promote fair lending and does not tolerate discrimination relative to borrower race, color, religion, sex, handicap, familial status, age, national origin or ancestry. Presto Auto Loans, Inc. supports the letter and spirit of these laws and does not condone discrimination in credit transactions.
Presto Auto Loans, Inc. posts a current copy of this Policy on its web site.
When appropriate, Presto Loan Centers, LLC. obtains written agreements from third party providers acknowledging their responsibility to comply with Company policies and procedures contained in Underwriting and
Pricing Presto Loan Centers, LLC. offers borrowers the available products for which the borrower would qualify based on his/her creditworthiness, ability to document income and combined loan-to-value.
The Compliance Department reviews and approves all marketing material prior to distribution to ensure compliance with fair lending laws. The Compliance Department also periodically reviews such existing marketing strategies to confirm that they remain in compliance with fair lending laws.
V. Monitoring & Assessment
Presto Auto Loans, Inc. implements monitoring processes that review the lending practices of the institution, and individuals within the departments. Presto Auto Loans, Inc.’s monitoring program focuses on detecting deficiencies and ensuring that Presto Auto Loans, Inc.’s personnel understand their duties and responsibilities under this plan and are carrying them out. The Quality Control Team performs regular audits of loan files to monitor data integrity for funded and non-funded loans and the results are provided to Senior Management for review and corrective action if necessary. Loan files are monitored as part of the routine Quality Control (“QC”) process for conformance with these requirements. QC audit results are reviewed for conformance with the policy.
Oversight of monitoring and dissemination of the reporting is the responsibility of the Management or his/her designee. The report is distributed to the Chief Executive Officer, or his/her designee. In the event a variance is found, the Manager requests a meeting with the employees involved to review the results and take prompt and appropriate corrective action. If required, a corrective action memo is placed in the employee’s file. Recurring problems are addressed in the manner set forth in the Presto Auto Loans, Inc. Employee Handbook.
It is the policy of Presto Auto Loans, Inc. to address complaints from applicants and existing borrowers (including complaints alleging or suggesting discrimination) in a prompt and fair manner and to ensure that all unresolved complaints are elevated to the appropriate management team members on a timely basis for resolution. Complaints are resolved in accordance with the Presto Auto Loans, Inc. Complaint Policy.
It is the policy of Presto Auto Loans, Inc. for employees engaged in the loan origination process (including Loan Originators, processors, closers, underwriters and managers) to complete fair lending training programs which are designed to educate team members on compliance with local, state and federal fair lending laws, practices and procedures. New employees receive a copy of this Policy.