Assess whether pricing disparities are justified by legitimate factors

SITUATION Fair-lending officer at a mortgage company after a pricing-regression spike is reviewing small-business decline comparative file set after a vendor score change with no disparate-impact test. The question on that extract is whether pricing disparities are justified by legitimate factors. The packet does not yet prove Remove access or reverse the item versus Temporary compensating control.

DECISION Fair-lending officer in a mortgage company after a pricing-regression spike must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using small-business decline comparative file set after a vendor score change with no disparate-impact test.

HYPOTHESES TO TEST 1. Small-business decline comparative file set reads as Remove access or reverse the item once a vendor score change with no disparate-impact test is lined up to the same Fair Lending population. 2. Small-business decline comparative file set is closer to Temporary compensating control after a vendor score change with no disparate-impact test; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract. 3. Approve a documented exception is still live in small-business decline comparative file set for fair-lending officer in a mortgage company after a pricing-regression spike. 4. Small-business decline comparative file set is missing the fact fair-lending officer needs after a vendor score change with no disparate-impact test; stop this Fair Lending close.

ANALYSIS REQUIRED 1. Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a vendor score change with no disparate-impact test. 2. Flag any disparate-impact table fair-lending officer cannot explain from small-business decline comparative file set. 3. Test a documented exception versus a pattern a mortgage company after a pricing-regression spike must defend. 4. For this Fair Lending Pricing and Credit Limits file, read small-business decline comparative file set against a vendor score change with no disparate-impact test and write the one fact that would move pricing disparities are justified for fair-lending officer.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (small-business decline comparative file set after a vendor score change with no disparate-impact test). The follow-on Pricing and Credit Limits action is what fair-lending officer 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 small-business decline comparative file set, then the action for fair-lending officer - Hypothesis scorecard against small-business decline comparative file set: supported / rejected / untestable - Regulatory or exam hook Pricing and Credit Limits would cite - Pricing and Credit Limits finding in small-business decline comparative file set that a second reviewer can re-perform