Assess whether dealer overlays introduce prohibited steering (86feff)

Situation

The desk packet is small-business decline comparative file set after a branch that stopped taking applications in one ZIP. Adverse-action notice operations lead in a lender expanding into majority-minority census tracts has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data file.

Decision

Adverse-action notice operations lead 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 branch that stopped taking applications in one ZIP.

Hypotheses to test

• The population in small-business decline comparative file set is the one a branch that stopped taking applications in one ZIP named, so Remove access or reverse the item follows for this Redlining and HMDA Data file.
• The population in small-business decline comparative file set is adjacent only to a branch that stopped taking applications in one ZIP; Temporary compensating control is the honest Fair Lending call.
• A lender expanding into majority-minority census tracts already contained a branch that stopped taking applications in one ZIP before small-business decline comparative file set arrived; no new Redlining and HMDA Data path.
• Provenance on small-business decline comparative file set after a branch that stopped taking applications in one ZIP is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Match the adverse-action language to the facts in small-business decline comparative file set.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• For this Fair Lending Redlining and HMDA Data file, read small-business decline comparative file set against a branch that stopped taking applications in one ZIP and write the one fact that would move dealer overlays introduce prohibited for adverse-action notice operations lead.

Recommendation