Assess whether comparative files show second-review bias (9b4ce7)

Situation

After a vendor score change with no disparate-impact test, mortgage pricing residual by prohibited-basis group is what second-review underwriter can touch in a lender expanding into majority-minority census tracts. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this 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 mortgage pricing residual by prohibited-basis group after a vendor score change with no disparate-impact test.

Hypotheses to test

• The population in mortgage pricing residual by prohibited-basis group is the one a vendor score change with no disparate-impact test named, so Remove access or reverse the item follows for this CRA and Special-Purpose Programs file.
• The population in mortgage pricing residual by prohibited-basis group is adjacent only to a vendor score change with no disparate-impact test; Temporary compensating control is the honest Fair Lending call.
• A lender expanding into majority-minority census tracts already contained a vendor score change with no disparate-impact test before mortgage pricing residual by prohibited-basis group arrived; no new CRA and Special-Purpose Programs path.
• Provenance on mortgage pricing residual by prohibited-basis group after a vendor score change with no disparate-impact test is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

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 mortgage pricing residual by prohibited-basis group.
• Check HMDA coding and underwriting policy against comparative files show second-review.
• For this Fair Lending CRA and Special-Purpose Programs file, read mortgage pricing residual by prohibited-basis group against a vendor score change with no disparate-impact test and write the one fact that would move comparative files show second-review for second-review underwriter.

Recommendation