Can a bank hide their internal fairness audit during a lawsuit?

The situation

I am a homeowner in Ohio, and I am currently in the middle of a legal dispute with my local mortgage lender. About six months ago, in February, I noticed that the interest rates they were offering me were significantly higher than what they were giving to other applicants with almost identical credit scores and income levels. I believe I was being unfairly targeted or discriminated against during my loan application process last summer. My lawyer told me that the bank actually ran an internal 'check-up' or audit back in December to see if their lending practices were following all the rules, and they found some mistakes that they are currently trying to fix. I want to see the results of that internal report to prove they knew they were doing something wrong. However, the bank's representatives told me that because they found the errors themselves and are working to correct them, those specific test results are private and cannot be used as evidence against them in my case. I have already filed my initial complaint, but now I am stuck. Can they actually keep those internal testing reports secret from me and the court just because they caught their own mistakes?

Detailed Analysis

Whether your mortgage lender can hide their December audit depends on whether that audit qualifies as a 'self-test' under federal law. Under the Fair Housing Act, a report is considered privileged—meaning it is legally protected from being used as evidence—if the lender "conducts, or authorizes an independent third party to conduct, a self-test... in order to determine the level or effectiveness of compliance"^[1]. This means the audit must have been done specifically to check if they were following fair lending rules.

Additionally, for the audit to stay secret, the bank must have "identified any possible violation... and has taken, or is taking, appropriate corrective action to address any such possible violation"^[1]. Since your lawyer mentioned the bank found mistakes and is currently trying to fix them, they may meet this second requirement. If they meet both conditions, the law states the results "may not be obtained or used by any applicant... in any proceeding or civil action in which one or more violations of this subchapter are alleged"^[1].

Similar rules apply to credit transactions under the Consumer Credit Protection Act, which also allows for privileged self-tests if the creditor is working to fix identified errors^[2].

However, it is not certain if the bank's specific 'check-up' meets the strict legal definition of a 'self-test.' If the audit was just a routine business review and not a formal compliance test, it might not be protected. Furthermore, the bank cannot use the audit as a defense to claim they did nothing wrong; if they try to use the audit to defend themselves, they may lose the right to keep it secret^[1].

Note that state laws in Ohio may provide additional rules regarding evidence and discovery in civil lawsuits.

Statutory Citations

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