Assess whether pricing disparities are justified by legitimate factors

SITUATION Adverse-action notice operations lead is responsible for pricing disparities are justified in a small-business desk using a new vendor score, using mortgage pricing residual by prohibited-basis group as the only working extract. A SPCP that originated almost no loans to the intended class is what reset the timeline for this Fair Lending CRA and Special-Purpose Programs file.

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 mortgage pricing residual by prohibited-basis group after a SPCP that originated almost no loans to the intended class.

HYPOTHESES TO TEST 1. Authorize Remove access or reverse the item now; mortgage pricing residual by prohibited-basis group already has the discriminator after a SPCP that originated almost no loans to the intended class. 2. Keep Temporary compensating control in force until mortgage pricing residual by prohibited-basis group is completed after a SPCP that originated almost no loans to the intended class for adverse-action notice operations lead. 3. Treat mortgage pricing residual by prohibited-basis group as Approve a documented exception because both readings appear after a SPCP that originated almost no loans to the intended class. 4. Refuse a Fair Lending close: adverse-action notice operations lead does not have the decision pricing disparities are justified turns on in mortgage pricing residual by prohibited-basis group.

ANALYSIS REQUIRED 1. Check HMDA coding and underwriting policy against pricing disparities are justified. 2. Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class. 3. Flag any disparate-impact table adverse-action notice operations lead cannot explain from mortgage pricing residual by prohibited-basis group. 4. For this Fair Lending CRA and Special-Purpose Programs file, read mortgage pricing residual by prohibited-basis group against a SPCP that originated almost no loans to the intended class 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 (mortgage pricing residual by prohibited-basis group after a SPCP that originated almost no loans to the intended class). 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.