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In the lending and credit practices field, ERS Group
uses our extensive expertise in the employment
discrimination arena to appropriately analyze loan and
credit matters. ERS Group has worked on more than
30 projects involving lending and credit analysis and
ongoing monitoring analysis for mortgage companies,
banks, and financial corporations.
ERS Group economists have appeared before the
Department of Justice, the Federal Reserve Bank, and
other regulatory agencies as experts on issues involving
credit decisions. Our knowledge of economic and
statistical issues, combined with ownership of extensive
computer resources, provides the background and means to
produce sophisticated equal opportunity analyses of
these practices.
While in the past regulatory agencies have
scrutinized lending and credit practices from a
financial and fiduciary perspective, for over a decade
they have increased efforts to investigate financial
institutions' lending and credit decisions from an equal
opportunity perspective. This shift has led to a
demand for organizations that can:
- Objectively evaluate the neutrality of past lending
and credit decisions.
- Clearly present these analyses to regulatory agencies
and courts.
- Appropriately determine alleged economic damages
by class of loan or on a loan-by-loan basis.
- Periodically monitor future
credit decisions in
order to detect patterns that have an adverse impact
on protected demographic groups.
The demands of designing and performing appropriate
analyses in the data-intensive environment of lending
and credit litigation require experts with the resource
capacity and flexibility to respond to the varying
demands of trial and discovery schedules. Whether
analyzing issues involving thousands or millions of
mortgage or credit contracts, ERS Group allocates the
expertise, professional staff and technical support that
most efficiently meet a client's needs while maintaining
the highest quality of work product.
ERS Group's approach emphasizes the need to reflect
actual lending practices, borrower populations and
market forces within the statistical model. Our
models provide effective responses to investigations into lending
discrimination charges, because they can describe
realistic lender-borrower situations. The analyses
we conduct help determine whether there is evidence to
support allegations of discrimination based on age,
race, ethnicity, gender, and low-to-moderate income
buyer status. ERS Group has worked with companies
to investigate allegations of redlining in the loan
application process and to examine equal opportunity
aspects of the loan or credit terms - including note
rate, the annual percentage rate (APR), broker points,
lender points, assignment of risk classifications and
differences in foreclosure rates by protected group
status.
ERS Group's computer resources and experienced
economists are able to process large amounts of data in
very sophisticated statistical analyses. ERS Group
also integrates data from databases that they have
developed, such as a Mortgage and Interest Rates Data
Bank to provide contextualized analyses of practices
that are effective in response to regulatory inquires,
civil litigation or in formulating future pricing
practices.
ERS Group economists investigate the effects of the
demographics of loan recipients and non-recipients as
well as the potential effects on the terms of lending
agreements. Ready access to national Bureau of
Census data and publicly available loan data in
combination with ERS Group's previous experience with
lending cases ensures that the conclusions reached are
statistically sound and reliable.
Institutions interested in anticipating the results
of an audit of its lending practices utilize the
resources of ERS Group to provide analyses that can be
replicated by the institution's staff in later periods.
ERS Group's analyses are designed to identify potential
problems that need correcting as well as problems that
require more complex statistical review.
ERS Group also prepares settlement estimates that
are within the terms specified by the courts, and
incorporate customer and lender characteristics along
with other relevant financial factors.
ERS Group economists and programmers have designed
user-friendly software systems that monitor lending
decisions and identify potential problem areas. Each
system is customized to meet the compliance criteria
and the specific institutional needs of our clients.
We also assist clients in their evaluation and adoption
of off-the-shelf software products when appropriate.
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Directors and Officers of MBank Retain ERS Group to Review Lending Practices
After the failure of MBank, a large Dallas-based commercial bank, counsel for its directors and officers retained an ERS Group economist to review all of the bank’s major lending relationships. The purpose of the review was to analyze and evaluate the bank’s lending policies and practices, to identify and characterize shortcomings in those policies and practices, and to assess and respond to charges by the FDIC that the bank’s policies and practices were fundamentally unsafe and unsound.
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ERS Group Assists in Lender Liability Lawsuits
ERS Group economists conducted more than thirty investigations of claims for damages arising in lender liability lawsuits against commercial banks and savings and loans.
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Cason v. Nissan Motor Acceptance Corporation
ERS Group was retained by the Defendant to prepare in-depth analyses of pricing decisions utilizing both company and market data.
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Rodriguez v. Ford Motor Credit Corporation
ERS Group was retained by the Defendant to prepare analyses of rate differentials among automobile contracts sold to customers. The Court denied class certification.
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Starr v. Fleet Finance
ERS Group collected data and analyzed loan data on behalf of the Defendant.
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James Wilcox and T. Vermilyea
(2002).
Who is Unbanked, and Why: Results from a Large, New Survey of Low- and Moderate-Income Individuals.
Proceedings of the 38th Annual Bank Structure Conference
Federal Reserve Bank of Chicago.
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James Wilcox and S.H. Kwan
(2002).
Hidden Cost Reductions in Bank Mergers: Accounting for More Productive Banks.
Research in Finance
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Alan Hess and K. Laisathit
(1997).
A Market-Based Risk Classification of Financial Institutions.
Journal of Financial Services Research
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James Wilcox and D. Hancock
(1997).
Bank Capital, Nonbank Finance, and Real Estate Activity.
Journal of Housing Research
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James Wilcox and J. Peek
(1991).
The Measurement and Determinants of Single-Family House Prices.
AREUEA Journal
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Alan Hess and C. Smith
(1988).
Elements of Mortgage Securitization.
Journal of Real Estate Finance and Economics
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Alan Hess and P.A. Malatesta
(1986).
Discount Mortgage Financing and Housing Prices.
Housing Finance Review
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