Assess whether dealer overlays introduce prohibited steering (0e30a5)

Situation

SPCP written plan versus actual originations arrived with a branch that stopped taking applications in one ZIP for second-review underwriter. That is a Fair Lending Examination and Notices decision on dealer overlays introduce prohibited in a credit union rolling out a special-purpose credit program.

Decision

Second-review underwriter in a credit union rolling out a special-purpose credit program must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using SPCP written plan versus actual originations after a branch that stopped taking applications in one ZIP.

Hypotheses to test

• Authorize Remove access or reverse the item now; SPCP written plan versus actual originations already has the discriminator after a branch that stopped taking applications in one ZIP.
• Keep Temporary compensating control in force until SPCP written plan versus actual originations is completed after a branch that stopped taking applications in one ZIP for second-review underwriter.
• Treat SPCP written plan versus actual originations as Approve a documented exception because both readings appear after a branch that stopped taking applications in one ZIP.
• Refuse a Fair Lending close: second-review underwriter does not have the page dealer overlays introduce prohibited turns on in SPCP written plan versus actual originations.

Analysis required

• Compare SPCP written plan versus actual originations to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• Flag any disparate-impact table second-review underwriter cannot explain from SPCP written plan versus actual originations.
• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• For this Fair Lending Examination and Notices file, read SPCP written plan versus actual originations against a branch that stopped taking applications in one ZIP and write the one fact that would move dealer overlays introduce prohibited for second-review underwriter.

Recommendation

A credit union rolling out a special-purpose credit program needs a named owner on dealer overlays introduce prohibited. Assign second-review underwriter to execute Remove access or reverse the item when SPCP written plan versus actual originations after a branch that stopped taking applications in one ZIP is complete, or Temporary compensating control when the Examination and Notices packet still lacks the discriminator in SPCP written plan versus actual originations.