Assess whether dealer overlays introduce prohibited steering (7b2662)

Situation

Small-business decline comparative file set arrived with a board asking if the bank should settle a matched-pair study for fair-lending officer. That is a Fair Lending CRA and Special-Purpose Programs decision on dealer overlays introduce prohibited in a bank with thin HMDA LAR quality.

Decision

Fair-lending officer in a bank with thin HMDA LAR quality must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using small-business decline comparative file set after a board asking if the bank should settle a matched-pair study.

Hypotheses to test

• Fair-lending officer can defend Remove access or reverse the item from small-business decline comparative file set after a board asking if the bank should settle a matched-pair study in a Fair Lending challenge.
• Fair-lending officer cannot defend Remove access or reverse the item from small-business decline comparative file set; Temporary compensating control is what the extract actually supports after a board asking if the bank should settle a matched-pair study.
• A board asking if the bank should settle a matched-pair study never reached the population in small-business decline comparative file set — reopen intake, do not close dealer overlays introduce prohibited.
• Two facts in small-business decline comparative file set after a board asking if the bank should settle a matched-pair study conflict for fair-lending officer; hold this CRA and Special-Purpose Programs file.

Analysis required

• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a board asking if the bank should settle a matched-pair study.
• Flag any disparate-impact table fair-lending officer cannot explain from small-business decline comparative file set.
• For this Fair Lending CRA and Special-Purpose Programs file, read small-business decline comparative file set against a board asking if the bank should settle a matched-pair study and write the one fact that would move dealer overlays introduce prohibited for fair-lending officer.

Recommendation

Small-business decline comparative file set after a board asking if the bank should settle a matched-pair study is the only extract fair-lending officer can defend for dealer overlays introduce prohibited in a bank with thin HMDA LAR quality. Choose the option small-business decline comparative file set actually carries, then the next CRA and Special-Purpose Programs action for fair-lending officer. The hypothesis still open on small-business decline comparative file set is: Fair-lending officer can defend Remove access or reverse the item from small-business decline comparative file set after a board asking if the bank should settl