Assess whether line assignments have a disparate impact the bank will defend

Situation

An exception rate twice as high for one group after credit controls put appraisal-gap outcomes in majority-minority tracts in front of adverse-action notice operations lead in a lender expanding into majority-minority census tracts. This Fair Lending / Redlining and HMDA Data close is line assignments have a from appraisal-gap outcomes in majority-minority tracts, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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 appraisal-gap outcomes in majority-minority tracts after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• Appraisal-gap outcomes in majority-minority tracts reads as Remove access or reverse the item once an exception rate twice as high for one group after credit controls is lined up to the same Fair Lending population.
• Appraisal-gap outcomes in majority-minority tracts is closer to Temporary compensating control after an exception rate twice as high for one group after credit controls; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in appraisal-gap outcomes in majority-minority tracts for adverse-action notice operations lead in a lender expanding into majority-minority census tracts.
• Appraisal-gap outcomes in majority-minority tracts is missing the fact adverse-action notice operations lead needs after an exception rate twice as high for one group after credit controls; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against line assignments have a.
• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls.
• Flag any disparate-impact table adverse-action notice operations lead cannot explain from appraisal-gap outcomes in majority-minority tracts.
• For this Fair Lending Redlining and HMDA Data file, read appraisal-gap outcomes in majority-minority tracts against an exception rate twice as high for one group after credit controls and write the one fact that would move line assignments have a for adverse-action notice operations lead.