Assess whether dealer overlays introduce prohibited steering (eba207)

Situation

Second-review underwriter owns dealer overlays introduce prohibited inside a lender expanding into majority-minority census tracts with geographic application and origination heat map as the only packet. A DOJ or CFPB monitor request for pricing files is what changed the clock for this Fair Lending CRA and Special-Purpose Programs file.

Decision

Second-review underwriter in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using geographic application and origination heat map after a DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• A DOJ or CFPB monitor request for pricing files is noise around an already-controlled CRA and Special-Purpose Programs process in a lender expanding into majority-minority census tracts, given geographic application and origination heat map.
• A DOJ or CFPB monitor request for pricing files is the event in geographic application and origination heat map that forces Remove access or reverse the item for second-review underwriter under Fair Lending.
• Geographic application and origination heat map shows a one-file miss after a DOJ or CFPB monitor request for pricing files, not a CRA and Special-Purpose Programs program failure.
• Geographic application and origination heat map cannot decide dealer overlays introduce prohibited yet after a DOJ or CFPB monitor request for pricing files; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in geographic application and origination heat map.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• For this Fair Lending CRA and Special-Purpose Programs file, read geographic application and origination heat map against a DOJ or CFPB monitor request for pricing files and write the one fact that would move dealer overlays introduce prohibited for second-review underwriter.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (geographic application and origination heat map after a DOJ or CFPB monitor request for pricing files). Lead with the Fair Lending option geographic application and origination heat map can support after a DOJ or CFPB monitor request for pricing files, then the two facts that force it, then the Monday action for second-review underwriter in a lender expanding into majority-minority census tracts.