NRMLA ETHICS ADVISORY OPINION 2023-1 Ethical Considerations: Applicant Age and Loan (Credit) Pricing September 25, 2023 The Ethics and Standards Committee (the “Committee”) of the National Reverse Mortgage Lenders Association (“NRMLA”), the trade association of the reverse mortgage lending industry, enforces the NRMLA Code of Ethics and Responsibility (the “Code of Ethics”). All NRMLA Members are required to comply with the Code of Ethics as a condition of their continued membership in NRMLA. If the Committee determines that a NRMLA Member has not complied with the Code of Ethics, sanctions may be imposed, up to and including the termination of NRMLA membership. Committee decisions enforcing the Code of Ethics may be made public. The Code of Ethics may be found at www.NRMLAOnline.org. The Committee also interprets the Code of Ethics and, from time to time, may propose changes to it for consideration and approval by the NRMLA Board of Directors. Finally, the Committee periodically issues formal interpretations of the Code of Ethics (“Ethics Advisory Opinions”) for the guidance of NRMLA Members. The Committee’s Ethics Advisory Opinions may also be found at www.NRMLAOnline.org. This is one of a series of formal Committee interpretations of the NRMLA Code of Ethics. It is Ethics Advisory Opinion 2023-1 (Ethical Considerations: Applicant Age and Loan (Credit) Pricing). Introduction. This Ethics Advisory Opinion 2023-1 addresses a very important aspect of the relationship between NRMLA Members and the seniors whose financial security interests they are pledged to serve: the manner and extent to which NRMLA Members, consistent with the applicable requirements of the Code of Ethics, may offer less favorable credit pricing terms (such as higher interest rates) for loans to older reverse mortgage applicants (“Loans”) because of the Loan applicant’s age. Although it may be permissible for Loan investors and other industry participants to consider the borrower’s age (among other factors) as Loans are purchased and sold between and among them, this Ethics Advisory Opinion makes clear nonetheless that NRMLA Members may not offer less favorable credit pricing terms to reverse mortgage Loan applicants based on an applicant’s more advanced age or a proxy for an applicant’s age. Discussion. The first Value that the NRMLA Code of Ethics embraces is Fairness. Fairness under the Code of Ethics requires that NRMLA Members “treat consumers with respect and dignity, and in a manner that is fair, reasonable, and as they would want to be treated.” 82
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