Assess whether dealer overlays introduce prohibited steering (eb73b8)

Situation

A lender expanding into majority-minority census tracts cannot treat a SPCP that originated almost no loans to the intended class as color commentary on adverse-action notice principal-reason sample. Adverse-action notice operations lead must close dealer overlays introduce prohibited from that extract under Fair Lending / Redlining and HMDA Data.

Decision

Adverse-action notice operations lead in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Adverse-action notice operations lead can defend Remove access or reverse the item from adverse-action notice principal-reason sample after a SPCP that originated almost no loans to the intended class in a Fair Lending challenge.
• Adverse-action notice operations lead cannot defend Remove access or reverse the item from adverse-action notice principal-reason sample; Temporary compensating control is what the extract actually supports after a SPCP that originated almost no loans to the intended class.
• A SPCP that originated almost no loans to the intended class never reached the population in adverse-action notice principal-reason sample — reopen intake, do not close dealer overlays introduce prohibited.
• Two facts in adverse-action notice principal-reason sample after a SPCP that originated almost no loans to the intended class conflict for adverse-action notice operations lead; hold this Redlining and HMDA Data file.

Analysis required

• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• For this Fair Lending Redlining and HMDA Data file, read adverse-action notice principal-reason sample against a SPCP that originated almost no loans to the intended class and write the one fact that would move dealer overlays introduce prohibited for adverse-action notice operations lead.

Recommendation