Assess whether comparative files show second-review bias (805f5f)

Situation

Fair-lending officer in an institution preparing for a redlining exam has one working extract — appraisal-gap outcomes in majority-minority tracts — after an exception rate twice as high for one group after credit controls. If appraisal-gap outcomes in majority-minority tracts cannot support comparative files show second-review, the honest Fair Lending output is hold.

Decision

Fair-lending officer 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 appraisal-gap outcomes in majority-minority tracts after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• An exception rate twice as high for one group after credit controls is noise around an already-controlled Examination and Notices process in an institution preparing for a redlining exam, given appraisal-gap outcomes in majority-minority tracts.
• An exception rate twice as high for one group after credit controls is the event in appraisal-gap outcomes in majority-minority tracts that forces Remove access or reverse the item for fair-lending officer under Fair Lending.
• Appraisal-gap outcomes in majority-minority tracts shows a one-file miss after an exception rate twice as high for one group after credit controls, not a Examination and Notices program failure.
• Appraisal-gap outcomes in majority-minority tracts cannot decide comparative files show second-review yet after an exception rate twice as high for one group after credit controls; hold is the only Fair Lending close an institution preparing for a redlining exam can defend.

Analysis required

• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls.
• Flag any disparate-impact table fair-lending officer cannot explain from appraisal-gap outcomes in majority-minority tracts.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• For this Fair Lending Examination and Notices file, read appraisal-gap outcomes in majority-minority tracts against an exception rate twice as high for one group after credit controls and write the one fact that would move comparative files show second-review for fair-lending officer.