N.Y. Comp. Codes R. & Regs. tit. 3, § 120.4 – Performance evaluations; public disclosure.

(a) From time to time, as determined by the superintendent, the department will evaluate the record of performance in helping to meet the credit needs of the community of each mortgage banker who has originated 200 or more mortgage loans in New York State in the last calendar year reportable under HMDA. The evaluation shall be conducted pursuant to section 28-bb of the Banking Law and the tests set forth in section 120.6 of this Part. The department will assign a rating for a mortgage banker reflecting the department’s assessment of the mortgage banker’s record of helping to meet the credit needs of the community. In general, a mortgage banker that received an “Outstanding” on its most recent evaluation will be evaluated less frequently than a mortgage banker that received a lower rating, unless the department has cause to conduct an evaluation more frequently.
(b) In conducting an evaluation of a mortgage banker under this Part, the department may perform its evaluation on-site at the institution or at the department; require the submission of written responses to department requests for documentation and other information, including responses to the so-called “First Day Letter” or similar requests; interview mortgage banker personnel; conduct branch visits; and require any other information or documentation, or utilize any other procedure that the superintendent deems necessary. The department may rely, in part, on any similar evaluation by another state, commonwealth, or territory or upon any similar evaluation by the appropriate Federal regulatory authorities of a mortgage banker.
(c) The lending and service performance for each mortgage banker evaluated under paragraph (1) of subdivision (a) of section 120.6 of this Part shall be assigned one of the four following ratings: Outstanding, Satisfactory, Needs to Improve, or Substantial Noncompliance. A mortgage banker’s performance need not fit each aspect of a particular rating profile for the mortgage banker to receive that rating, and exceptionally strong performance with respect to some aspects may compensate for weak performance in others. The mortgage banker’s overall performance must be consistent with safe and sound business practices and generally consistent with the appropriate rating profile. The department’s assessment shall form the basis of the numerical rating based on a 1-4 scoring system assigned to each such mortgage banker by the department. Specifically, such numerical scores shall represent performance assessments as follows:
1. (1) outstanding record of meeting the credit needs of the community (“Outstanding” or “1”);
2. (2) satisfactory record of meeting the credit needs of the community (“Satisfactory” or “2”);
3. (3) needs to improve record of meeting the credit needs of the community (“Needs to Improve” or “3”); and
4. (4) substantial noncompliance in meeting the credit needs of the community (“Substantial Noncompliance” or “4”).
  (d) Evidence of discriminatory or other illegal credit practices.
5. (1) The department’s evaluation of a mortgage banker’s performance in meeting the credit needs of the community is adversely affected by evidence of discriminatory or other illegal credit practices in any geography by the mortgage banker. In connection with any type of lending activity described in subdivision (a) of section 120.7 of this Part, evidence of discriminatory or other credit practices that violate an applicable law, rule, or regulation includes, but is not limited to:
  1. (i) discrimination against applicants on a prohibited basis in violation, for example, of section 296-a of the New York State Executive Law, the Equal Credit Opportunity Act, or the Fair Housing Act;
  2. (ii) violation of either section 6-l of the Banking Law or the Home Ownership and Equity Protection Act;
  3. (iii) violation of section 5 of the Federal Trade Commission Act;
  4. (iv) violation of section 8 of the Real Estate Settlement Procedures Act; and
  5. (v) violation of the Truth in Lending Act provisions regarding a consumer’s right of rescission.
6. (2) In determining the effect of evidence of practices described in paragraph (1) of subdivision (d) of this section on the mortgage banker’s assigned rating, the department considers the nature, extent, and strength of the evidence of the practices; the policies and procedures that the mortgage banker has in place to prevent the practices; any corrective action that the mortgage banker has taken or has committed to take, including voluntary corrective action resulting from self-assessment; and other relevant information.
(e) The department will prepare a written summary of the results of its assessment, and the rating and the written summary will be made available to the public.