Assess whether pricing disparities are justified by legitimate factors

SITUATION Redlining and HMDA Data work in a small-business desk using a new vendor score now turns on pricing disparities are justified because a vendor score change with no disparate-impact test put appraisal-gap outcomes in majority-minority tracts in play. Redlining and HMDA Data work in a small-business desk using a new vendor score now turns on pricing disparities are justified because a vendor score change with no disparate-impact test put appraisal-gap outcomes in majority-minority tracts in play; second-review underwriter should say what appraisal-gap outcomes in majority-minority tracts proves for Fair Lending.

DECISION Second-review underwriter in a small-business desk using a new vendor score 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 a vendor score change with no disparate-impact test.

HYPOTHESES TO TEST 1. The population in appraisal-gap outcomes in majority-minority tracts is the one a vendor score change with no disparate-impact test named, so Remove access or reverse the item follows for this Redlining and HMDA Data file. 2. The population in appraisal-gap outcomes in majority-minority tracts is adjacent only to a vendor score change with no disparate-impact test; Temporary compensating control is the honest Fair Lending call. 3. A small-business desk using a new vendor score already contained a vendor score change with no disparate-impact test before appraisal-gap outcomes in majority-minority tracts arrived; no new Redlining and HMDA Data path. 4. Provenance on appraisal-gap outcomes in majority-minority tracts 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 1. Match the adverse-action language to the facts in appraisal-gap outcomes in majority-minority tracts. 2. Check HMDA coding and underwriting policy against pricing disparities are justified. 3. Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a vendor score change with no disparate-impact test. 4. For this Fair Lending Redlining and HMDA Data file, read appraisal-gap outcomes in majority-minority tracts against a vendor score change with no disparate-impact test and write the one fact that would move pricing disparities are justified for second-review underwriter.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (appraisal-gap outcomes in majority-minority tracts after a vendor score change with no disparate-impact test). If appraisal-gap outcomes in majority-minority tracts cannot force a Fair Lending label under Redlining and HMDA Data, stop. If appraisal-gap outcomes in majority-minority tracts after a vendor score change with no disparate-impact test cannot support Remove access or reverse the item versus Temporary compensating control on this Fair Lending Redlining and HMDA Data close, second-review underwriter must do not infer a control or scheme beyond the transaction and entitlement evidence.