Assess whether pricing disparities are justified by legitimate factors

SITUATION Community-development lender in a manufactured-housing lender with dealer-originated files has one working extract — adverse-action notice principal-reason sample — after a vendor score change with no disparate-impact test. If adverse-action notice principal-reason sample cannot support pricing disparities are justified, the only defensible Fair Lending output is hold.

DECISION Community-development lender in a manufactured-housing lender with dealer-originated files must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after a vendor score change with no disparate-impact test.

HYPOTHESES TO TEST 1. Community-development lender can defend Remove access or reverse the item from adverse-action notice principal-reason sample after a vendor score change with no disparate-impact test in a Fair Lending challenge. 2. Community-development lender cannot defend Remove access or reverse the item from adverse-action notice principal-reason sample; Temporary compensating control is what the extract actually supports after a vendor score change with no disparate-impact test. 3. A vendor score change with no disparate-impact test never reached the population in adverse-action notice principal-reason sample — reopen intake, do not close pricing disparities are justified. 4. Two facts in adverse-action notice principal-reason sample after a vendor score change with no disparate-impact test conflict for community-development lender; hold this Examination and Notices file.

ANALYSIS REQUIRED 1. Match the adverse-action language to the facts in adverse-action notice principal-reason sample. 2. Check HMDA coding and underwriting policy against pricing disparities are justified. 3. Compare adverse-action notice principal-reason sample to similarly situated files, second-review notes, and reason codes after a vendor score change with no disparate-impact test. 4. For this Fair Lending Examination and Notices file, read adverse-action notice principal-reason sample against a vendor score change with no disparate-impact test and write the one fact that would move pricing disparities are justified for community-development lender.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (adverse-action notice principal-reason sample after a vendor score change with no disparate-impact test). Lead with the Fair Lending option adverse-action notice principal-reason sample can support after a vendor score change with no disparate-impact test, then the two facts that force it, then the Monday action for community-development lender in a manufactured-housing lender with dealer-originated files.