In the United States, the legislation that includes provisions governing the use of computerized loan origination is the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B.
The ECOA, enacted in 1974, is a federal law that prohibits lenders from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. Regulation B, which is issued by the Consumer Financial Protection Bureau (CFPB), implements the ECOA and provides detailed guidelines for lenders to ensure fair lending practices.
Under Regulation B, lenders are required to provide equal access to credit and apply consistent underwriting standards regardless of the method used to evaluate a loan application, including computerized loan origination systems. This means that lenders must ensure that their computerized loan origination systems do not result in discriminatory practices or outcomes based on the prohibited factors.
Additionally, the Fair Housing Act (FHA) and its implementing regulations may also come into play, as they prohibit discrimination in housing-related transactions, including mortgage lending. The FHA is enforced by the U.S. Department of Housing and Urban Development (HUD).
It's worth noting that there may be additional state-specific laws and regulations that govern the use of computerized loan origination systems, so it's important for lenders to comply with both federal and state requirements to ensure fair lending practices.