Assess whether a special-purpose program is well designed or a pretext

Situation

Examination and Notices work in a credit union rolling out a special-purpose credit program now turns on a special-purpose program is because a CRA PE that called the assessment area too narrow put adverse-action notice principal-reason sample in play. Second-review underwriter should say what adverse-action notice principal-reason sample proves.

Decision

Second-review underwriter in a credit union rolling out a special-purpose credit program must choose A special-purpose program is well designed / A pretext using adverse-action notice principal-reason sample after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• A CRA PE that called the assessment area too narrow is noise around an already-controlled Examination and Notices process in a credit union rolling out a special-purpose credit program, given adverse-action notice principal-reason sample.
• A CRA PE that called the assessment area too narrow is the event in adverse-action notice principal-reason sample that forces A special-purpose program is well designed for second-review underwriter under Fair Lending.
• Adverse-action notice principal-reason sample shows a one-file miss after a CRA PE that called the assessment area too narrow, not a Examination and Notices program failure.
• Adverse-action notice principal-reason sample cannot decide a special-purpose program is yet after a CRA PE that called the assessment area too narrow; hold is the only Fair Lending close a credit union rolling out a special-purpose credit program can defend.

Analysis required

• Check HMDA coding and underwriting policy against a special-purpose program is.
• Compare adverse-action notice principal-reason sample to similarly situated files, second-review notes, and reason codes after a CRA PE that called the assessment area too narrow.
• Flag any disparate-impact table second-review underwriter cannot explain from adverse-action notice principal-reason sample.
• For this Fair Lending Examination and Notices file, read adverse-action notice principal-reason sample against a CRA PE that called the assessment area too narrow and write the one fact that would move a special-purpose program is for second-review underwriter.

Recommendation