Assess whether pricing disparities are justified by legitimate factors

SITUATION A notice that cites 'other' as the principal reason 40% of the time put manufactured-housing dealer overlay notes in front of CRA strategist in an institution preparing for a redlining exam. This Fair Lending / Redlining and HMDA Data close is pricing disparities are justified from manufactured-housing dealer overlay notes, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

DECISION CRA strategist 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 manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time.

HYPOTHESES TO TEST 1. Authorize Remove access or reverse the item now; manufactured-housing dealer overlay notes already has the discriminator after a notice that cites 'other' as the principal reason 40% of the time. 2. Keep Temporary compensating control in force until manufactured-housing dealer overlay notes is completed after a notice that cites 'other' as the principal reason 40% of the time for CRA strategist. 3. Treat manufactured-housing dealer overlay notes as Approve a documented exception because both readings appear after a notice that cites 'other' as the principal reason 40% of the time. 4. Refuse a Fair Lending close: CRA strategist does not have the decision pricing disparities are justified turns on in manufactured-housing dealer overlay notes.

ANALYSIS REQUIRED 1. Check HMDA coding and underwriting policy against pricing disparities are justified. 2. Compare manufactured-housing dealer overlay notes to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time. 3. Flag any disparate-impact table CRA strategist cannot explain from manufactured-housing dealer overlay notes. 4. For this Fair Lending Redlining and HMDA Data file, read manufactured-housing dealer overlay notes against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move pricing disparities are justified for CRA strategist.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time). The follow-on Redlining and HMDA Data action is what CRA strategist does next: implement the option, assign an owner, and log the missing fact.

COMMAND RETURNS - Bottom-line Fair Lending option on pricing disparities are justified, then the evidence in manufactured-housing dealer overlay notes, then the action for CRA strategist - Hypothesis scorecard against manufactured-housing dealer overlay notes: supported / rejected / untestable - Missing page in manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time, if any - Regulatory or exam hook Redlining and HMDA Data would cite