Assess whether dealer overlays introduce prohibited steering (a29ac2)

Situation

An institution preparing for a redlining exam cannot treat a SPCP that originated almost no loans to the intended class as color commentary on mortgage pricing residual by prohibited-basis group. Community-development lender must close dealer overlays introduce prohibited from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

Community-development lender in an institution preparing for a redlining exam 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

• Community-development lender can defend Remove access or reverse the item from mortgage pricing residual by prohibited-basis group after a SPCP that originated almost no loans to the intended class in a Fair Lending challenge.
• Community-development lender cannot defend Remove access or reverse the item from mortgage pricing residual by prohibited-basis group; Temporary compensating control is what the extract actually supports after a SPCP that originated almost no loans to the intended class.
• A SPCP that originated almost no loans to the intended class never reached the population in mortgage pricing residual by prohibited-basis group — reopen intake, do not close dealer overlays introduce prohibited.
• Two facts in mortgage pricing residual by prohibited-basis group after a SPCP that originated almost no loans to the intended class conflict for community-development lender; hold this CRA and Special-Purpose Programs file.

Analysis required

• Flag any disparate-impact table community-development lender cannot explain from mortgage pricing residual by prohibited-basis group.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• Match the adverse-action language to the facts in mortgage pricing residual by prohibited-basis group.
• 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 dealer overlays introduce prohibited for community-development lender.

Recommendation