Assess whether pricing disparities are justified by legitimate factors

SITUATION Adverse-action notice operations lead in a small-business desk using a new vendor score has one working extract — geographic application and origination heat map — after a DOJ or CFPB monitor request for pricing files. Adverse-action notice operations lead in a small-business desk using a new vendor score has geographic application and origination heat map after a DOJ or CFPB monitor request for pricing files. If that extract cannot support pricing disparities are justified, the only defensible Fair Lending CRA and Special-Purpose Programs output is hold.

DECISION Adverse-action notice operations lead in a small-business desk using a new vendor score must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using geographic application and origination heat map after a DOJ or CFPB monitor request for pricing files.

HYPOTHESES TO TEST 1. Geographic application and origination heat map reads as Remove access or reverse the item once a DOJ or CFPB monitor request for pricing files is lined up to the same Fair Lending population. 2. Geographic application and origination heat map is closer to Temporary compensating control after a DOJ or CFPB monitor request for pricing files; 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 geographic application and origination heat map for adverse-action notice operations lead in a small-business desk using a new vendor score. 4. Geographic application and origination heat map is missing the fact adverse-action notice operations lead needs after a DOJ or CFPB monitor request for pricing files; stop this Fair Lending close.

ANALYSIS REQUIRED 1. Check HMDA coding and underwriting policy against pricing disparities are justified. 2. Compare geographic application and origination heat map to similarly situated files, second-review notes, and reason codes after a DOJ or CFPB monitor request for pricing files. 3. Flag any disparate-impact table adverse-action notice operations lead cannot explain from geographic application and origination heat map. 4. For this Fair Lending CRA and Special-Purpose Programs file, read geographic application and origination heat map against a DOJ or CFPB monitor request for pricing files and write the one fact that would move pricing disparities are justified for adverse-action notice operations lead.

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 (geographic application and origination heat map after a DOJ or CFPB monitor request for pricing files). The follow-on CRA and Special-Purpose Programs action is what adverse-action notice operations lead does next: implement the option, assign an owner, and log the missing fact.