Assess whether comparative files show second-review bias (fe4570)

Situation

CRA and Special-Purpose Programs work in a mortgage company after a pricing-regression spike now turns on comparative files show second-review because an exception rate twice as high for one group after credit controls put adverse-action notice principal-reason sample in play. CRA strategist should say what adverse-action notice principal-reason sample proves.

Decision

CRA strategist in a mortgage company after a pricing-regression spike must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• The population in adverse-action notice principal-reason sample is the one an exception rate twice as high for one group after credit controls named, so Remove access or reverse the item follows for this CRA and Special-Purpose Programs file.
• The population in adverse-action notice principal-reason sample is adjacent only to an exception rate twice as high for one group after credit controls; Temporary compensating control is the honest Fair Lending call.
• A mortgage company after a pricing-regression spike already contained an exception rate twice as high for one group after credit controls before adverse-action notice principal-reason sample arrived; no new CRA and Special-Purpose Programs path.
• Provenance on adverse-action notice principal-reason sample after an exception rate twice as high for one group after credit controls is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Test a documented exception versus a pattern a mortgage company after a pricing-regression spike must defend.
• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• Check HMDA coding and underwriting policy against comparative files show second-review.
• For this Fair Lending CRA and Special-Purpose Programs file, read adverse-action notice principal-reason sample against an exception rate twice as high for one group after credit controls and write the one fact that would move comparative files show second-review for CRA strategist.

Recommendation