Assess whether a redlining pattern exists after controls (fdfd62)

Situation

In a lender expanding into majority-minority census tracts, CRA assessment-area versus lending footprint is the evidence after a marketing mailer that skipped majority-minority tracts. 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 CRA assessment-area versus lending footprint.

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 CRA assessment-area versus lending footprint after a marketing mailer that skipped majority-minority tracts.

Hypotheses to test

• A marketing mailer that skipped majority-minority tracts is noise around an already-controlled CRA and Special-Purpose Programs process in a lender expanding into majority-minority census tracts, given CRA assessment-area versus lending footprint.
• A marketing mailer that skipped majority-minority tracts is the event in CRA assessment-area versus lending footprint that forces Remove access or reverse the item for second-review underwriter under Fair Lending.
• CRA assessment-area versus lending footprint shows a one-file miss after a marketing mailer that skipped majority-minority tracts, not a CRA and Special-Purpose Programs program failure.
• CRA assessment-area versus lending footprint cannot decide a redlining pattern exists yet after a marketing mailer that skipped majority-minority tracts; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in CRA assessment-area versus lending footprint.
• Check HMDA coding and underwriting policy against a redlining pattern exists.
• For this Fair Lending CRA and Special-Purpose Programs file, read CRA assessment-area versus lending footprint against a marketing mailer that skipped majority-minority tracts and write the one fact that would move a redlining pattern exists for second-review underwriter.

Recommendation