Whether pricing disparities are justified by legitimate factors from SPCP

Situation

Pricing and Credit Limits work in a lender expanding into majority-minority census tracts now turns on pricing disparities are justified because a community complaint about appraisal gaps put SPCP written plan versus actual originations in play. HMDA data-quality manager should say what SPCP written plan versus actual originations proves.

Decision

HMDA data-quality manager 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 community complaint about appraisal gaps.

Hypotheses to test

• SPCP written plan versus actual originations reads as Remove access or reverse the item once a community complaint about appraisal gaps is lined up to the same Fair Lending population.
• SPCP written plan versus actual originations is closer to Temporary compensating control after a community complaint about appraisal gaps; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in SPCP written plan versus actual originations for HMDA data-quality manager in a lender expanding into majority-minority census tracts.
• SPCP written plan versus actual originations is missing the fact HMDA data-quality manager needs after a community complaint about appraisal gaps; stop this Fair Lending close.

Analysis required

• Compare SPCP written plan versus actual originations to similarly situated files, second-review notes, and reason codes after a community complaint about appraisal gaps.
• Flag any disparate-impact table HMDA data-quality manager 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.
• For this Fair Lending Pricing and Credit Limits file, read SPCP written plan versus actual originations against a community complaint about appraisal gaps and write the one fact that would move pricing disparities are justified for HMDA data-quality manager.

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 (SPCP written plan versus actual originations after a community complaint about appraisal gaps). The follow-on Pricing and Credit Limits action is what HMDA data-quality manager does next: implement the option, assign an owner, and log the missing fact.