Assess whether dealer overlays introduce prohibited steering (339dce)

Situation

A notice that cites 'other' as the principal reason 40% of the time put geographic application and origination heat map in front of model-risk partner for credit scoring in a lender expanding into majority-minority census tracts. This Fair Lending / Examination and Notices close is dealer overlays introduce prohibited from geographic application and origination heat map, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Model-risk partner for credit scoring 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 geographic application and origination heat map after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• Authorize Remove access or reverse the item now; geographic application and origination heat map already has the discriminator after a notice that cites 'other' as the principal reason 40% of the time.
• Keep Temporary compensating control in force until geographic application and origination heat map is completed after a notice that cites 'other' as the principal reason 40% of the time for model-risk partner for credit scoring.
• Treat geographic application and origination heat map as Approve a documented exception because both readings appear after a notice that cites 'other' as the principal reason 40% of the time.
• Refuse a Fair Lending close: model-risk partner for credit scoring does not have the page dealer overlays introduce prohibited turns on in geographic application and origination heat map.

Analysis required

• Match the adverse-action language to the facts in geographic application and origination heat map.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare geographic application and origination heat map to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• For this Fair Lending Examination and Notices file, read geographic application and origination heat map against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move dealer overlays introduce prohibited for model-risk partner for credit scoring.