Assess whether pricing disparities are justified by legitimate factors

SITUATION Redlining and HMDA Data work in a mortgage company after a pricing-regression spike now turns on pricing disparities are justified because an exception rate twice as high for one group after credit controls put CRA assessment-area versus lending footprint in play. Redlining and HMDA Data work in a mortgage company after a pricing-regression spike now turns on pricing disparities are justified because an exception rate twice as high for one group after credit controls put CRA assessment-area versus lending footprint in play; community-development lender should say what CRA assessment-area versus lending footprint proves for Fair Lending.

DECISION Community-development lender in a mortgage company after a pricing-regression spike must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using CRA assessment-area versus lending footprint after an exception rate twice as high for one group after credit controls.

HYPOTHESES TO TEST 1. CRA assessment-area versus lending footprint reads as Remove access or reverse the item once an exception rate twice as high for one group after credit controls is lined up to the same Fair Lending population. 2. CRA assessment-area versus lending footprint is closer to Temporary compensating control after an exception rate twice as high for one group after credit controls; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract. 3. Approve a documented exception is still live in CRA assessment-area versus lending footprint for community-development lender in a mortgage company after a pricing-regression spike. 4. CRA assessment-area versus lending footprint is missing the fact community-development lender needs after an exception rate twice as high for one group after credit controls; stop this Fair Lending close.

ANALYSIS REQUIRED 1. Check HMDA coding and underwriting policy against pricing disparities are justified. 2. Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls. 3. Flag any disparate-impact table community-development lender cannot explain from CRA assessment-area versus lending footprint. 4. For this Fair Lending Redlining and HMDA Data file, read CRA assessment-area versus lending footprint against an exception rate twice as high for one group after credit controls and write the one fact that would move pricing disparities are justified for community-development lender.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (CRA assessment-area versus lending footprint after an exception rate twice as high for one group after credit controls). If CRA assessment-area versus lending footprint cannot force a Fair Lending label under Redlining and HMDA Data, stop. If CRA assessment-area versus lending footprint after an exception rate twice as high for one group after credit controls cannot support Remove access or reverse the item versus Temporary compensating control on this Fair Lending Redlining and HMDA Data close, community-development lender must do not infer a control or scheme beyond the transaction and entitlement evidence.