Assess whether pricing disparities are justified by legitimate factors

SITUATION The working file is mortgage pricing residual by prohibited-basis group after a board asking if the bank should settle a matched-pair study. Community-development lender in a manufactured-housing lender with dealer-originated files has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Examination and Notices file.

DECISION Community-development lender in a manufactured-housing lender with dealer-originated files must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using mortgage pricing residual by prohibited-basis group after a board asking if the bank should settle a matched-pair study.

HYPOTHESES TO TEST 1. Authorize Remove access or reverse the item now; mortgage pricing residual by prohibited-basis group already has the discriminator after a board asking if the bank should settle a matched-pair study. 2. Keep Temporary compensating control in force until mortgage pricing residual by prohibited-basis group is completed after a board asking if the bank should settle a matched-pair study for community-development lender. 3. Treat mortgage pricing residual by prohibited-basis group as Approve a documented exception because both readings appear after a board asking if the bank should settle a matched-pair study. 4. Refuse a Fair Lending close: community-development lender does not have the decision pricing disparities are justified turns on in mortgage pricing residual by prohibited-basis group.

ANALYSIS REQUIRED 1. Flag any disparate-impact table community-development lender cannot explain from mortgage pricing residual by prohibited-basis group. 2. Test a documented exception versus a pattern a manufactured-housing lender with dealer-originated files must defend. 3. Match the adverse-action language to the facts in mortgage pricing residual by prohibited-basis group. 4. For this Fair Lending Examination and Notices file, read mortgage pricing residual by prohibited-basis group against a board asking if the bank should settle a matched-pair study 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 / Examination and Notices packet (mortgage pricing residual by prohibited-basis group after a board asking if the bank should settle a matched-pair study). The follow-on Examination and Notices action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.

COMMAND RETURNS - Bottom-line Fair Lending option on pricing disparities are justified, then the evidence in mortgage pricing residual by prohibited-basis group, then the action for community-development lender - Hypothesis scorecard against mortgage pricing residual by prohibited-basis group: supported / rejected / untestable - Regulatory or exam hook Examination and Notices would cite - Examination and Notices finding in mortgage pricing residual by prohibited-basis group that a second reviewer can re-perform