Assess whether dealer overlays introduce prohibited steering (d94273)

Situation

A SPCP that originated almost no loans to the intended class put SPCP written plan versus actual originations in front of second-review underwriter in a lender expanding into majority-minority census tracts. This Fair Lending / CRA and Special-Purpose Programs close is dealer overlays introduce prohibited from SPCP written plan versus actual originations, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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 SPCP written plan versus actual originations after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Second-review underwriter can defend Remove access or reverse the item from SPCP written plan versus actual originations after a SPCP that originated almost no loans to the intended class in a Fair Lending challenge.
• Second-review underwriter cannot defend Remove access or reverse the item from SPCP written plan versus actual originations; Temporary compensating control is what the extract actually supports after a SPCP that originated almost no loans to the intended class.
• A SPCP that originated almost no loans to the intended class never reached the population in SPCP written plan versus actual originations — reopen intake, do not close dealer overlays introduce prohibited.
• Two facts in SPCP written plan versus actual originations after a SPCP that originated almost no loans to the intended class conflict for second-review underwriter; hold this CRA and Special-Purpose Programs file.

Analysis required

• 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 lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in SPCP written plan versus actual originations.
• For this Fair Lending CRA and Special-Purpose Programs file, read SPCP written plan versus actual originations against a SPCP that originated almost no loans to the intended class and write the one fact that would move dealer overlays introduce prohibited for second-review underwriter.