Assess whether dealer overlays introduce prohibited steering (1cda16)

Situation

A vendor score change with no disparate-impact test put CRA assessment-area versus lending footprint in front of second-review underwriter in a small-business desk using a new vendor score. This Fair Lending / Redlining and HMDA Data close is dealer overlays introduce prohibited from CRA assessment-area versus lending footprint, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Second-review underwriter 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 CRA assessment-area versus lending footprint after a vendor score change with no disparate-impact test.

Hypotheses to test

• Second-review underwriter can defend Remove access or reverse the item from CRA assessment-area versus lending footprint after a vendor score change with no disparate-impact test in a Fair Lending challenge.
• Second-review underwriter cannot defend Remove access or reverse the item from CRA assessment-area versus lending footprint; Temporary compensating control is what the extract actually supports after a vendor score change with no disparate-impact test.
• A vendor score change with no disparate-impact test never reached the population in CRA assessment-area versus lending footprint — reopen intake, do not close dealer overlays introduce prohibited.
• Two facts in CRA assessment-area versus lending footprint after a vendor score change with no disparate-impact test conflict for second-review underwriter; hold this Redlining and HMDA Data file.

Analysis required

• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• Match the adverse-action language to the facts in CRA assessment-area versus lending footprint.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• For this Fair Lending Redlining and HMDA Data file, read CRA assessment-area versus lending footprint against a vendor score change with no disparate-impact test and write the one fact that would move dealer overlays introduce prohibited for second-review underwriter.

Recommendation