Assess whether dealer overlays introduce prohibited steering (76a4cb)

Situation

A CRA PE that called the assessment area too narrow put small-business decline comparative file set in front of second-review underwriter in a lender expanding into majority-minority census tracts. This Fair Lending / CRA and Special-Purpose Programs close is dealer overlays introduce prohibited from small-business decline comparative file set, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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 small-business decline comparative file set after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• Small-business decline comparative file set reads as Remove access or reverse the item once a CRA PE that called the assessment area too narrow is lined up to the same Fair Lending population.
• Small-business decline comparative file set is closer to Temporary compensating control after a CRA PE that called the assessment area too narrow; Remove access or reverse the item would over-claim this CRA and Special-Purpose Programs extract.
• Approve a documented exception is still live in small-business decline comparative file set for second-review underwriter in a lender expanding into majority-minority census tracts.
• Small-business decline comparative file set is missing the fact second-review underwriter needs after a CRA PE that called the assessment area too narrow; stop this Fair Lending close.

Analysis required

• Match the adverse-action language to the facts in small-business decline comparative file set.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a CRA PE that called the assessment area too narrow.
• For this Fair Lending CRA and Special-Purpose Programs file, read small-business decline comparative file set against a CRA PE that called the assessment area too narrow and write the one fact that would move dealer overlays introduce prohibited for second-review underwriter.

Recommendation