Dealer Overlays Introduce Prohibited Steering — HMDA LAR Validity

Situation

Second-review underwriter owns dealer overlays introduce prohibited inside a credit-card issuer changing line-assignment logic with HMDA LAR validity and quality edits as the only packet. A SPCP that originated almost no loans to the intended class is what changed the clock for this Fair Lending Pricing and Credit Limits file.

Decision

Second-review underwriter in a credit-card issuer changing line-assignment logic must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using HMDA LAR validity and quality edits after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• HMDA LAR validity and quality edits reads as Remove access or reverse the item once a SPCP that originated almost no loans to the intended class is lined up to the same Fair Lending population.
• HMDA LAR validity and quality edits is closer to Temporary compensating control after a SPCP that originated almost no loans to the intended class; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in HMDA LAR validity and quality edits for second-review underwriter in a credit-card issuer changing line-assignment logic.
• HMDA LAR validity and quality edits is missing the fact second-review underwriter needs after a SPCP that originated almost no loans to the intended class; stop this Fair Lending close.

Analysis required

• Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class.
• Flag any disparate-impact table second-review underwriter cannot explain from HMDA LAR validity and quality edits.
• Test a documented exception versus a pattern a credit-card issuer changing line-assignment logic must defend.
• For this Fair Lending Pricing and Credit Limits file, read HMDA LAR validity and quality edits 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.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (HMDA LAR validity and quality edits after a SPCP that originated almost no loans to the intended class). Lead with the Fair Lending option HMDA LAR validity and quality edits can support after a SPCP that originated almost no loans to the intended class, then the two facts that force it, then the Monday action for second-review underwriter in a credit-card issuer changing line-assignment logic.