Whether dealer overlays introduce prohibited steering from small-business

Situation

Exam-response coordinator in an institution preparing for a redlining exam has one working extract — small-business decline comparative file set — after a notice that cites 'other' as the principal reason 40% of the time. If small-business decline comparative file set cannot support dealer overlays introduce prohibited, the honest Fair Lending output is hold.

Decision

Exam-response coordinator in an institution preparing for a redlining exam must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using small-business decline comparative file set after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• Small-business decline comparative file set reads as Remove access or reverse the item once a notice that cites 'other' as the principal reason 40% of the time is lined up to the same Fair Lending population.
• Small-business decline comparative file set is closer to Temporary compensating control after a notice that cites 'other' as the principal reason 40% of the time; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in small-business decline comparative file set for exam-response coordinator in an institution preparing for a redlining exam.
• Small-business decline comparative file set is missing the fact exam-response coordinator needs after a notice that cites 'other' as the principal reason 40% of the time; stop this Fair Lending close.

Analysis required

• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• Flag any disparate-impact table exam-response coordinator cannot explain from small-business decline comparative file set.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• For this Fair Lending Pricing and Credit Limits file, read small-business decline comparative file set against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move dealer overlays introduce prohibited for exam-response coordinator.

Recommendation