Assess whether a redlining pattern exists after controls (e29c2b)

Situation

A redlining pattern exists sits with second-review underwriter because a vendor score change with no disparate-impact test hit a lender expanding into majority-minority census tracts. Evidence is appraisal-gap outcomes in majority-minority tracts; write the Fair Lending CRA and Special-Purpose Programs option that extract can carry.

Decision

Second-review underwriter 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 appraisal-gap outcomes in majority-minority tracts after a vendor score change with no disparate-impact test.

Hypotheses to test

• Second-review underwriter can defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts after a vendor score change with no disparate-impact test in a Fair Lending challenge.
• Second-review underwriter cannot defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts; Temporary compensating control is what the extract actually supports after a vendor score change with no disparate-impact test.
• A vendor score change with no disparate-impact test never reached the population in appraisal-gap outcomes in majority-minority tracts — reopen intake, do not close a redlining pattern exists.
• Two facts in appraisal-gap outcomes in majority-minority tracts after a vendor score change with no disparate-impact test conflict for second-review underwriter; hold this CRA and Special-Purpose Programs file.

Analysis required

• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a vendor score change with no disparate-impact test.
• Flag any disparate-impact table second-review underwriter cannot explain from appraisal-gap outcomes in majority-minority tracts.
• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read appraisal-gap outcomes in majority-minority tracts against a vendor score change with no disparate-impact test and write the one fact that would move a redlining pattern exists for second-review underwriter.

Recommendation