Assess whether the exam response should concede a finding (ce702d)

SITUATION In a lender expanding into majority-minority census tracts, small-business decline comparative file set is the evidence after a community complaint about appraisal gaps. Second-review underwriter has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending CRA and Special-Purpose Programs close using small-business decline comparative file set.

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 small-business decline comparative file set after a community complaint about appraisal gaps.

HYPOTHESES TO TEST 1. Small-business decline comparative file set reads as Remove access or reverse the item once a community complaint about appraisal gaps is lined up to the same Fair Lending population. 2. Small-business decline comparative file set is closer to Temporary compensating control after a community complaint about appraisal gaps; Remove access or reverse the item would over-claim this CRA and Special-Purpose Programs extract. 3. Approve a documented exception is still live in small-business decline comparative file set for second-review underwriter in a lender expanding into majority-minority census tracts. 4. Small-business decline comparative file set is missing the fact second-review underwriter needs after a community complaint about appraisal gaps; stop this Fair Lending close.

ANALYSIS REQUIRED 1. Flag any disparate-impact table second-review underwriter cannot explain from small-business decline comparative file set. 2. Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend. 3. Match the adverse-action language to the facts in small-business decline comparative file set. 4. For this Fair Lending CRA and Special-Purpose Programs file, read small-business decline comparative file set against a community complaint about appraisal gaps and write the one fact that would move the exam response should for second-review underwriter.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (small-business decline comparative file set after a community complaint about appraisal gaps). Lead with the Fair Lending option small-business decline comparative file set can support after a community complaint about appraisal gaps, then the two facts that force it, then the Monday action for second-review underwriter in a lender expanding into majority-minority census tracts.