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Author Tory Haggerty: Unfair Lending: Why Discrimination In Banking Still Exists

The roots of racial discrimination ran deeper into the financial system. Today, unfair lending still exists in banking. It’s time to uproot this evil in the financial system! Today, Tory Haggerty, the Author of Unfair Lending: Why Discrimination In Banking Still Exists And How to Prevent It, reveals the faults in the financial system and provides some tips and strategies to address the problem. Appraisal bias and whitewashing cause a tremendous impact on the value of the home owned by the minority group. Tory also discussed how AI does not help solve this problem, and instead, it replicates it because AI is learning from a discriminatory world. Tune in for more!


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Author Tory Haggerty: Unfair Lending: Why Discrimination In Banking Still Exists

I'm here with Tory Haggerty. Tory, how are you doing?

I'm doing great, Mark. Thanks for having me.

You got it. I am glad to have you on. I've seen you on LinkedIn. I know you've got a book that we're going to reference. You've got a great bio. I want to have people understand the journey you've taken from your bio. It's very interesting to me. Tory is a best-selling author and compliance professional who has taught dozens of compliance topics to thousands of bankers over his banking career. He started out as an FDIC Commissioned Examiner and has sat in about every scene including compliance officer, auditor, and CEO of a consulting company.

He has also founded a training university, launching the nation's first-ever commercially available fair lending school and fair lending certification. He's passionate about compliance and helping other people understand this often complex topic. He will admit his memory is unique, which led him to enjoy working with regulations. I can relate to that. I have a strange fascination with regulations myself. He says that his brain remembers things that nobody else cares to remember, like every baseball World Series champion since 1947. I quizzed him. The three I asked about are all related to the Minnesota Twins, 2 that they won and 1 that they lost, and he nailed it, or all 46 presidents in order.

He loves teaching compliance. With more than 300 exams and audit projects under his belt, he has many stories to rely on when teaching. He's also a master dart player, a holder of seven state championship titles, a mediocre bowler, and a recovering golfer. He also retired after twenty years in the Air National Guard as an officer. Thank you for your service. My in-laws did that. My father-in-law was a navigator.

I've referenced the fair lending schools that he created and the certification. That led to him, in May of 2022, publishing his first book called Unfair Lending: Why Discrimination in Banking Still Exists and How to Prevent It. We're going to talk a little bit about the book and all of the things above. I'm excited to have you and share your knowledge with my viewers. How are you doing?

Thanks, Mark. I'm awesome. It's great to be here. I like talking about fair lending and compliance. It is usually not an exciting topic for most people but it’s something you need to be passionate about, and I am. I'm very happy to be here and talking with you.

I'm excited to pick your brain. I mentioned that you were a Commission Compliance Examiner with FDIC. My background was 33 years at NCUA. It was all NCUA. NCUA has generalist examiners that handle compliance. They have specialists that will handle fair lending, but they only do roughly 25 or 30 of those a year. It’s like getting audited by the IRS. It doesn't happen very often, but if it does happen, it can be intense.

The flip side of that is where you came from in the journey that you were on with FDIC before you went off into consulting. It is that the FDIC has a more robust, more detailed full exam, a separate exam on compliance, and things like that. Maybe we could touch upon that as we maybe compare and contrast that as it relates to credit unions, banks, and the things that you've seen with FDIC and now you are consulting both for banks and credit unions.

That's a good place to start. Honestly, I see the NCUA and the credit union world leading in that direction. The FDIC pretty much split it out. The OCC and NCUA are a little bit different in how they do things, but the exam team is very similar. NCUA are generalists. They cover all areas. The FDIC says, “Safety and soundness, we're going to send you off on this track.

You're going to do risk management and CAMELS components. You're going to do BSA and IT.” Over here, we have a whole different set of examiners’ compliance. You have fair lending. We have the Community Reinvestment Act, which I know doesn't apply to most credit unions. Maybe you have a state law. You have all this consumer compliance that goes off on its own tangent.

Don't get me wrong. There are three dozen laws and regulations that you need to know, but as an FDIC examiner that specialized in compliance, I got really good at doing just compliance. I don’t anymore, but at the FDIC, when we do compliance reviews, we did fair lending at every single examination. Every time, that was a three-year cycle. Regardless of the size or the complexity of the bank, every compliance exam had a fair lending component.

If you're small and non-complex and there's not a lot to do and not a lot of risk, then it may be a pretty easy examination. If you're large and complex, it could be a large part of the examination, but it was expected. That's what we did every single time. That has changed over the years. It’s risk-focused. They may dig in deep in some areas or sometimes it may be high level.

For a credit union to sit here and listen to that thinking that every bank pretty much gets an exam every time, they may have never even seen a fair lending review. I'm not saying that that necessarily is the future for credit unions, but we all can see that we're starting to go down that route. Credit unions need to start paying attention and educating themselves on, “How do I prepare for that? How do I build a fair lending program?” it’s because we all want the same thing.

My goal, and I talk about this in my book, too, is to end discrimination in the lending industry. That's what our goal is. I realize that's a big lofty goal. What's one White guy in the middle of the upper Midwest going to do to accomplish a goal like that? I've devoted the rest of my career to trying to accomplish that. Through education, we can make a dent in that.

Educating credit unions is another step towards, “Here's what you can do to build prevention into your program.”

The goal is to end discrimination in the lending industry.

I've said this on other podcasts, online, and things to my email list. I fully believe NCUA is going to move more towards compliance as a bigger emphasis. I doubt they'll ever get to a separate exam like the FDIC structure. Chairman Todd Harper is going to be around for another five years. He doesn't have a second Democratic vote to do the type of expanding, whether it's doubling the amount of fair lending exams that happen or tripling it.

I will predict that when his term is up five years from 2023, NCUA will be doing more of the fair lending exams and other compliance-type emphasis. When I was there, he was in public and congressional affairs as the director and a political appointee working for the NCUA before he became chair. He was very passionate about it. He fully believes in the importance of it as do you and as do I.

He's in a position or about to be in a position when Biden puts in another Democrat after Hood’s term comes up where he can influence that. He's been wanting to influence it more than he already has. He talks about it a lot. He's had some more resources added to it, and he has put his footprint on it. Being able to control the budget with another democratic vote is going to impact it in some ways.

Credit unions can expect to have the likelihood of having a fair lending exam go up. To that point, you talked about prevention, training, and things. If you've had a fair lending exam from NCUA, they can point out some things that can be helpful and you can have some a-ha moments, but it's much better if when they come in, they go, “You had everything buckled down. You prevented it.” Teach a man to fish and he can fish forever. Teach a man or a woman to eliminate fair lending and your organization is going to be better. Let's discuss what you've learned about how to achieve that, how you help your clients achieve that, and how you educate people in that to that end.

One of the things that we look at in our school, which I talk about in the book, is building a program free of discrimination. Policies and procedures are a big part of that. Policies and procedures can be a buzzword. You can throw that around. I can rubber stamp a policy.

The second exam I was ever part of after I started as an examiner, I'm sitting down and I'm reading this bank's loan policy. It says ABC Bank at the top of it. I look over to the examiner next to me and said, “I thought we were at 123 Bank?” He says, “We are.” I'm like, “This says ABC Bank at the top.” It didn't even have the right bank name at the top of the policy. He looked at me and shook his head. He said, “This happens all the time. You get some random policy from a buddy, a sister bank, or whatever and you rubber stamp it.”

WFC 124 | Unfair Lending
Unfair Lending: Policies and procedures are a big part of building a program free of discrimination.

Policies and procedures may not be effective, but building effective policies and procedures. What does that look like? First of all, it's specific to your organization. Second of all, they're clear and concise. How do you build clear and concise policies and procedures to help with a fair lending program? The biggest areas I look at are what you do in underwriting but also what you do in pricing. The decision on whether or not to make a loan is one of the biggest parts of fair lending.

How you set the terms, conditions, rates, and fees of the loan is another part. I can make you a loan even if you are a minority, a female, or whatever prohibited basis category you want. I can argue that I'm lending fairly, but if the terms and conditions are not as favorable as others with similar creditworthiness, it's still unfair lending. When I look at policies and procedures, I'm looking for clarity. I once reviewed a loan policy that said, “No recent late payments.” That was their guidance to their lenders. What the heck does that mean? What does no recent late payments mean?

What's the definition of recent? What's late?

Is that in the last 3, 6, 12, or 24 months? Is it only recent late payments with us or do I have to care about recent late payments with others? I once read a rate sheet on pricing loans that said, “Here's how you price luxury vehicles.” What's a luxury vehicle? If you ask my 21-year-old daughter, she thinks a new Honda Accord is a luxury vehicle. Don't get me wrong. I love Hondas. I've owned four, but in my opinion, a Honda Accord is not a luxury vehicle. What's your opinion, Mark? Does it have to be a certain brand? Does it have to be a certain value?

I'll know it when I see it.

Exactly. I also saw one that said, “Classic car.” What's classic? In the state of South Dakota where I live, the state government defines a classic vehicle, in other words, if I want to register it as classic, as 25 years or older. That's specific. That's clear. If I'm a lender, I know exactly what's expected of me. I know what a classic vehicle is. Saying classic vehicle, no recent late payments, or luxury vehicle is unclear. Everybody that's reading this can go back, look at your policy and procedures, and ask yourself, “Is there any way that a lender could interpret this differently either than what we intended, or can other lenders interpret this differently from each other?”

I like the swap-a-lender example that I use. What that says is to take a lender from another organization. I don't care if it's a bank, a credit union, or a mortgage company. Take a lender with ten years of experience. It is somebody that knows how to make loans, understands basic lending principles, and understands loan-to-value, debt-to-income, credit score, and all those fund things.

Grab them from another organization, sit them down at an office in your institution, and give them nothing except for your policies, procedures, and checklist. They're not allowed to ask a single question. Funnel ten customers to that lender and let them do their job. They should, following your policies and procedures, make the exact same fair and consistent loan decision every time only by following your policies and procedures. If they don't consistently make that loan decision, your policies and procedures are not clear, which opens you and your organization up to fair lending risk.

With that example, you triggered a synapse in my head. I was at a CUNA GAC event when I was at NCUA. They would have amazing speakers. They had Sully Sullenberger who landed the plane on the Hudson. The speech was riveting because it was the actual tape of him talking to air traffic control. He would pause and then say what was going through his mind, etc. The birds hit and they turned it around. They landed it on the Hudson and saved everybody's life.

He then explained how it related to the people he was speaking to. It was the fact that he went in. He was the pilot. His co-pilot was there. He had never met him in his life before. They were so well-trained and well-prepared based on the policies and procedures of how they knew to do what they were doing.

He would pause it and say, “If the co-pilot hadn't done this within a half second of what I said, we wouldn’t have landed the plane. If he hadn't done this, we wouldn't have landed the plane. We knew each other but we didn't know each other because of how well we were prepared to do what we were required to do.” It's not necessarily life and death, but it's the exact same thing with that swap the lender. If they can read those policies and procedures and make the same decision if you were if it was you looking at the loan.

When you're building a fair lending program, you're setting the stage. The FDIC pushes hard for a compliance management system. A compliance management system is your policies and procedures. That's the first component of your compliance program. The second component is training. How do you train your people? We are talking about basic fair lending training, but what about basic lender training? Think about bootcamp for lenders. How many organizations go through basic lender training?

Let's grab that tenure lender and bring them into our organization. I shouldn't have to train that tenure lender on basic lending principles. They should understand that. That's part of why I hired them, and that's part of why I'm paying them more than a brand-new lender trainee. However, have I trained them on my policies and procedures? Do they know how to calculate debt-to-income ratios at this organization? Do they know that we use NADA value or Kelley Blue Book? Do they know how we do appraisals or whatever? I need to train them on the basics of how my organization runs and train them on my policies and procedures.

Thinking of training, it's regulatory training. What does regulation mean? It tells us about race, color, religion, sex, national origin, the prohibited basis, and things like that. It's also training on how to do your job at your organization. A lot of times, that gets overlooked. You assume, “They've read the policy. They've read the procedures.” We all read it “when we start,” and then I don't see it again for another fifteen years.

We do lots of fair lending interviews when we do our fair lending audits. I sit down with the lender and ask them simple questions. I've done my homework in advance. This is an old examiner tool that I always recommend everybody do when they're reviewing their program. We teach it in our fair lending school. We have an entire module dedicated to fair lending interviews.

The basic premise is, first of all, you have to learn how lenders are supposed to do their job. You read the loan policy. You read the underwriting criterion. You go through checklists. You know how they price their loans. You then sit down and play dumb for half an hour. They are like, “Tell me how you take an application. How do you steer customers in loan products? How do you underwrite loans?” You’re like, “We have a loan-to-value.” They’re like, “Do you have a maximum loan-to-value?” You’re like, “Yeah. Our maximum loan-to-value is 90%.” I'm taking notes. Does that match what's in the policy?

I sat down with a guy one time in my examiner days and said, “How do you price loans?” He says, “We have a base rate of about 6% that we go off of.” I said, “Really? Your compliance officer said you have an internal rate sheet.” I know he has a rate sheet. It's in the stack of papers under where I'm taking notes, but he has no idea. He doesn't know that I know all of this stuff. I'm asking him simple questions.

He said, “We have a rate sheet.” I said, “That’s great. Can I see it?” He said, “Sure. Let me grab it for you.” This guy starts digging through his desk frantically for 3 or 4 minutes trying to find this rate sheet, and he finally hands it to me. It's dated 1996. I don't like throwing impromptu math at people, but if I've been doing this for fifteen years and it was dated 1996, you can tell how old that was. It is simply asking the question to a lender, “How do you price loans?” His answer was not accurate.

Those are the steps. You train people and then you ask questions and monitor. That's how you build prevention into your program. Give them a good program to set up free of discrimination and then make sure they follow it. That right there gets you 60% or 70% of the way to a discriminatory-free lending program.

The odds are he's not consistent. Is consistent in ways that violate the law?


You've opened yourself up to the reality that A) It's possible because he is not paying attention, and B) You opened yourself up to litigation and all that. What you described to me was what we used to call the Columbo approach to doing the exam. You probably know Columbo because of your thirst for knowledge and things but your age wouldn't indicate that you should. At NCUA, I had a few people that worked for me that used the Columbo approach.

I know it sounds that way, but it’s not. A fair lending interview usually lasts about 30 minutes. Fair lending interviews serve two purposes. The first purpose is to find out if lenders are following policies and procedures. I can look at data all day long. I can dig through loan files. I can do a file analysis and look at your HMDA data. The data only says one thing, but by sitting down and asking lenders basic questions on how they do their jobs, we have uncovered some of the most interesting findings and some egregious discrimination.

Oftentimes, the second part of a fair lending interview or the second reason for it is to find out if lenders are doing anything discriminatory. If you're reading this, you may think to yourself, “Why on earth would I as a lender ever admit to doing something discriminatory to an examiner in a fair lending exam or an auditor?” While that's a perfectly reasonable question, the simple answer is those lenders often have no idea that what they're doing is discriminatory. They'll freely admit, “This is the way I do business.” As a compliance officer, auditor, chief credit officer, or manager of a credit union, you want to sit down with your lenders and ask them basic questions about how they do their job.

They're shocked, surprised, and disappointed in themselves when you explain what the rule requires, what they're doing, and how it violates it. They then have that a-ha moment and look at it forever differently.

A piece of advice from somebody who's been auditing and examining for a long time. You have to keep an open, trustful, and honest environment. You can't be holding those things against your people either. You start doing these interviews and start having these conversations and find out your people aren't following policies and procedures or potentially are breaking the law. You start holding that against them. That'll be the last time that anyone ever has a fair landing interview with you. You have to have an open, honest, and collaborative culture at your organization when you do things to say, “We are doing this to uncover issues and get stronger as an organization, not to hold people's feet to the fire or for people to lose their jobs.”

You have to have an open, honest, collaborative culture at your organization to uncover issues and get stronger as an organization, not to hold people's feet to the fire or for people to lose their jobs.

It's latitude for learning. Nobody is perfect. You need to learn from your mistakes. Correct them so that you can stay on the right side of the law and serve your people as best you can. We chatted a little bit on the front end. Tell me a little bit about the school, how the school led to the book, and anything you'd like to share relative to that.

I feel that discrimination, redlining, and where we are as a society is interesting. There's a book, The Color of Law by Richard Rothstein. He's a professor. He wrote this book several years ago. It's the most comprehensive history of redlining that I've ever read. He wrote a follow-up book to it that I have not read yet that I have a copy of. There's a reason why. It’s because I am writing my second book on redlining. I want to finish my book and then I'm going to read his book because he gives some suggestions on how to fix redlining. I don't want his suggestions to influence my book, so I'm going to write mine first and then read and comment on his.

It's interesting because the Federal government, and this is what Richard argues in his book, pushed and required redlining on pretty much every major metro in the United States. They forced redlining and housing segregation on every metro all the way back from the Civil War but especially through the 1930s with the founding of the FHA. It's sad for me to say as a twenty-year Military veteran but even the VA would not guarantee or secure mortgages for people of color. That was an open, blatant, racist policy for decades all the way until the civil rights movement in the 1960s and the passage of the Fair Housing Act.

Think about this. In-state and local governments, it was all levels, pushed segregation on us as a country. The Federal government is hammering banks, mortgage companies, and credit unions for the redlining that they pushed upon us. It's a little bit ironic that they're trying to go back and clean up their problem. When I look at redlining, I don't necessarily blame the financial institutions. Our country was so segregated for so long that when you pass laws outlawing redlining, that doesn't erase the problem. People have been rooted in neighborhoods for decades or generations and all of a sudden, you open up credit to allow people to go anywhere. That doesn't mean they pick up and move.

When you look at this problem, you have racist policies that created a lot of these issues. I feel that anti-racist policies and education are what's going to move us forward as a country to start solving some of these problems. One of my goals through the school is to educate bankers, compliance officers, auditors, credit unions, and mortgage companies on how to build a program up from the ground in fair lending and then how to audit that program.

As an examiner, I got the opportunity to go through the FDIC's Fair Lending Examination School. As I got into the industry after my examiner days, I looked around and thought, “What a great opportunity. Everybody should get a chance to go through this fair lending school.” You can’t. You have to be a regulator. Some of the other regulators have their own fair lending schools as well, but unless you're a Federal regulator, you're not going to get a chance to go through fair lending schools.

You can, at best, go through a one-hour fair lending training that talks about the definitions of discrimination. They give you three examples of other organizations that have screwed up and say, “Good luck.” How is that helpful? That teaches me nothing about how to build a program. I know nothing about the loan life cycle of fair lending risks. I know nothing about how to do audits.

That was my goal. It was to teach organizations how to build a fair lending program and how to audit their fair lending program. That's how the school was born. I started creating it in 2019. We launched it in 2020. At the beginning of 2023, we redid it and filmed all new video content. We added two hours to the curriculum and added another video module. It teaches compliance officers and auditors everything they need to do and know how to build a program.

Some of the best stories from that, we took and we put into the book to say, “Here's how you build prevention into your program.” We mentioned it before. I'm a firm believer that it's so much easier to prevent something from happening than to clean it up after the fact. I feel that there are so many organizations out there, especially on the credit union side, that haven't had fair lending forced on them all these years like most banks have or, even more specifically, the FDIC has.

WFC 124 | Unfair Lending
Unfair Lending: Some of the best stories are in Unfair Lending to help build prevention into your program.

Once the NCUA starts pushing more on fair lending audits, we're going to start uncovering a lot more of these fair lending problems. I feel that credit unions could be doing themselves a service not only to themselves. Part of it is, call it selfishness. I don't care to call it self-preservation. I want to solve my problems so I don't get in trouble. That's one reason to want to get educated on fair lending. That's fine. I don't care if it's a selfish reason. Do that.

Number two, look at it as a way to better serve your community and have a more prosperous community. I once heard somebody say that the minority market for lending is a multitrillion-dollar market that has not been tapped near to its full potential. In other words, Black and Hispanic applicants around the country is a multitrillion-dollar market. They are not having access to credit because of discriminatory policies, procedures, laws, and redlining.

Think of how our communities could prosper if more people had access to the financial industry and could get a loan, buy a home, and start a business. It's a selfish reason, but think how an organization could prosper by growing into a new market that's previously untapped. The biggest thing is Majority-Minority Census Tracts are being redlined against, which is the heart of redlining. Those are risks. Look at those as big, scary fair lending risks or look at those as opportunities. They are opportunities to expand, opportunities to get into new markets, and opportunities to strengthen your community. What does that do? That strengthens everybody.

When you're talking about redlining and fair landing, there's a lot in the news about appraisal bias. Do you have any thoughts on how that might link or might not link to the discussion we're having here?

It's very much on the same topic. Appraisal bias is an issue that's been around for a long time but has only made the news recently. This is not a new issue. This is not a new topic. I don't want to call it a buzzword or anything like that. It's not a hot topic because it has been a significant issue for a long time. It's finally coming to the forefront.

I've seen some statistics. A large percentage of appraisers are White males. I don't remember the numbers. I want to say something like 70% or more of appraisers are men. I once thought I heard 97% of appraisers are White. The idea behind appraisal bias is when a human appraiser appraises a home either owned by a minority person or in a minority neighborhood and artificially deflates the value of that home by a significant amount.

Let's take a 2,000-square-foot home. You put it in a White neighborhood or a minority neighborhood. They could be two miles away from each other. The home in the minority neighborhood could be the same quality, the same build, and the same year. It could even be a nicer home in a minority neighborhood. It could be devalued at 10%, 40%, or 50% because it's in a minority neighborhood or simply because it's owned by a minority.

There's this term called Whitewashing. I'll be honest with you. I was ignorant until a few years ago. Whitewashing is for minority borrowers. This is old news for them. They've known this for a long time. For a lot of people, this is new news to us. Whitewashing is where you erase any evidence of the people that live in that home. Most people want to do this anyway when they’re selling their home. The idea is you don't want to have your family pictures and stuff in your home because you want the person that comes there to imagine it's their home.

When you have all your family pictures up, they're like, “That’s their home. I don't see myself in this home.” Whitewashing takes it a step further where you erase any evidence of even the race of the person that lives there. There's a very famous case in San Francisco where a minority couple was refinancing. They had their appraisal done and the home was appraised for about $900,000 or $950,000. They knew that the home was much higher value than that so they hired their own appraiser and Whitewashed their home. I believe that they went so far as to have a White neighbor pose as the homeowner.

They got their own appraisal and the value went up to nearly $1.5 million. In other words, it increased by almost 50%. That's all the proof they needed. They brought a lawsuit, which, I believe, is settled. I'm not sure if the details of the lawsuit were made public, but that's what Whitewashing is. It is devaluing those homes that are owned by minorities or in minority neighborhoods.

What you need to do as a credit union or as a mortgage department is to have a good finger on the pulse of the neighborhoods in which you operate and have a good understanding of what those home values are. If you see something, you have to say something. If you know that a home value comes in and it should be significantly higher in a certain neighborhood, you have to say something. If you let that go through, you're going to run into issues.

Here's a little bit of a tip, especially if you are a HMDA reporter and you have software, you can monitor this by looking at denials to minority borrowers for collateral value. If you see a high uptick in denials because of loan-to-value to minority borrowers, that can be one indicator of appraisal bias as well. Appraisal bias and the Federal government is the PAVE Task Force. I wish I could tell you what that acronym stands for, but it has to do with the valuation of collateral. It's such a big deal that there's a task force that has been created to address this issue.

To go a step further, there is AI. You would think, “Let's implement AI. AI doesn't discriminate. AI doesn't have human bias.” That's not true. To try to be as well-rounded as I can on fair lending, I read books on AI. I'm not an expert on AI by any means, but what I've learned from AI is what AI does is AI has to learn from somewhere. Artificial Intelligence, the definition of it is it's intelligent. It can learn.

AI has to learn from somewhere. AI learns from a discriminatory world. If you assign AI to assign a value to a home and imagine a White neighborhood over here to the West and a minority neighborhood over here to the East, and you have humans that are appraising these homes, and they are appraising these homes to the West in these White neighborhoods at $800,000 and these homes to the East that are comparable at $500,000, AI is going to see that. AI is going to replicate that discrimination. It learns from a discriminatory world. Don't think, “I have AI. I have automated models. It's going to solve all these problems.” No. If anything, it's going to replicate it at a rate that you can't even do as a human because AI can do it so much faster.

Garbage in, garbage out, right?

Absolutely. The old accounting adage.

It’s fascinating. This has been very educational. The Whitewashing term, you taught me that here. If there was one question that I didn't ask you that I should have, what would that be and what would your answer be?

Get educated on this. Get educated on how to build a fair lending program. If you want to check out our school, that’s great. If you want to get educated somewhere else, that’s great. Our goal and my goal is I want to see discrimination end in our industry. By the end of my career, I would like to be able to see where we eliminate discrimination in our industry.

Get educated on how to build a fair lending program.

I realize that's a lofty goal and maybe that's unattainable. If we can make an impact on that, see the cases of redlining going down, and DOJ referrals going down, I believe that racist policies got us where we are. Anti-racist policies and education can get us out of it. If you work for a credit union and you have anything to do with setting policy at your organization and building a program, get educated on these topics. Our school is You can check out our Fair Lending School. There are training opportunities out there.

Don't bury your head in the sand. I'm not saying that you have or you have not. It’s not because the NCUA may or may not have done an exam or you feel they're not even doing an exam. Number one, you should want to do this and build a program free of discrimination because it's the right thing to do. Number two, you should want to do it because your community is going to prosper.

For number three, I'll give you one final selfish reason. If you are a HMDA reporter, HMDA data is public. Even I have access to HMDA software. I can pull up any HMDA reporter I want in the country and I can start pulling fair lending reports. That is public data. I can see if you're redlining, steering, pricing, or have high denial rates.

If I can do that, anyone with access to HMDA data can do that. There are a lot of curious people, bored people, reporters, and whatnot that can do that to your organization as well. Even if it's a selfish self-preservation reason to do it, especially if you are a HMDA reporter, all of your performance data is public. You want to know about it before anyone else does. Think about it as an open-book test. You get to look up the answers, and there's no reason for you not to know it before everyone else does.

That's a great summary. You gave the information relative to the Tuscan Club Consulting. Do you have any other information you want to give on how someone could reach you if they wanted either to get your book or participate in some of the training that you offer?

Our book is available on Amazon. If you want to make Jeff Bezos a little bit richer, you can order it there or you can order it from our website, too. It's You can order a copy of our book. Those are shipped directly from us. I sign each one of those. If I send you a signed copy, I'm sorry, but it will not increase its value at all.

Not yet.

Let's be realistic here. Not yet, but maybe it will increase its sentimental value. We ship them out directly from us. If you want to get a copy of our book, you can certainly order it off our website or you can order it off of Amazon. You can check out our school from there as well. Otherwise, if you want to contact me directly, you can send me an email. My email address is You can reach out to us.

We do fair lending audits, but I will tell you that we are a small company. We've been around for a couple of years and have been very busy. We have little capacity to take on new clients at this point, which is a good problem to have. We often get a lot of requests for reviews and we don't have the time to do it. The point of our school is we teach you how to do the reviews so you can likely do it yourself. That's the goal and the point of it. We try to teach you how to do it yourself so you don't have to hire somebody because it's a lot more expensive, too.

That’s very good. Thanks. I've got this baseball thing I got to get out of my head. I'm not sure if I have it right, but 1988 World Series.

The Dodgers beat the heavily favored Oakland Athletics in five games.

Was that Kirk Gibson?

That was Kirk Gibson. It was game one. That was his only at-bat in the whole World Series. Granted, he was already beaten up pretty badly, but he got injured in the NLCS. He didn't appear in the whole game. Tommy Lasorda told him, “Get ready to hit. I might put you in.”

That was Eckersley. They were down a run and got all the way to the ninth inning. They got two outs.

Eckersley, I don't remember the batter before him, but he was facing a former teammate that had some pop in his bat. Eckersley was worried about him, but the guy on deck was a light hitter, so Eckersley walked him. He was worried about it so he walked him. Lasorda pulls the guy that was supposed to hit. He puts Gibson in who could barely even walk to the plate and Gibson ends up getting the count full.

Gibson tells a story about a scout that told him when Eckersley gets a left-hander to a 3-2 counting, he throws this backdoor slider. There's a video right before that pitch, Gibson steps out and he remembers that. He gets in and the pitch is coming. He touches the bat and it goes out. Honestly, I'm a huge Twins fan. ‘91 Kirby Puckett's home run is one of my favorites, but that home run sends chills up my spine every time.

As we were talking, I was thinking it was ‘88. I was doing it in my head. It's one of my most memorable TV-watching experiences. There was then him limping around.

The Oakland Athletics were a much superior team. They went to 3 World Series in a row and only won 1 in ‘89, which was overshadowed by the strike. They got swept by the Reds in ’90. They should have been one of baseball's dynasties. They were a dominant team. They only ended up winning 1 out of the 3 and it was overshadowed by the earthquake in ’89. They are passed over as an average team even though they were one of the best. Kurt Gibson was a big part of that.

He was a big part of it. I don't meet a lot of people who know that era of baseball better than I do but your memory is even better than mine. You taught me something about that Gibson home run that I thought I already knew everything about. This has been a lot of fun. I appreciate you being on the show.

Thank you so much. Thanks for having me.

You got it. Readers, I want to thank you for tuning in. I hope you'll tune in again. I’m signing off with flying colors.

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About Tory Haggerty

Tory Haggerty is a best-selling author and compliance professional who has taught dozens of compliance topics to thousands of bankers over his 15-year banking career. He started out as an FDIC commissioned examiner and has sat in about every seat since including compliance officer, auditor, and now CEO of a consulting company. He has also founded a training university, launching the nation’s first ever commercially available fair lending school and fair lending certification.

Tory is passionate about compliance and helping other people understand this often-complex topic. He will admit his memory is unique, which lead him to actually enjoy working with regulations. He says that his brain just remembers things that nobody else cares to remember, like every baseball world series champion since 1947 or all 46 presidents in order. He loves teaching compliance, and with more than 300 exam and audit projects under his belt, he has many stories to rely on when teaching. He’s also a master dart player, holder of 7 state championship titles, a mediocre bowler, and a recovering golfer.

Tory earned an M.B.A. from the University of South Dakota and a B.S. from South Dakota State University. Yes, these schools don’t typically get along, so he just always has to be mad at himself. He has also completed the Graduate School of Banking at Colorado and has earned five industry compliance certifications including the Certified Regulatory Compliance Manager designation. In 2020, he retired from the Air National Guard as an officer with more than 20 years of distinguished

military service.

In May 2022, Tory published his first Book: Unfair Lending: Why Discrimination In Banking Still Exists And How to Prevent It. In it’s first month, it reached the Amazon best-sellers list. He has also written compliance articles for and asked to speak at several banking trade associations.


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