Assess whether comparative files show second-review bias (8bcc2e)

Situation

After a CRA PE that called the assessment area too narrow, CRA assessment-area versus lending footprint is what community-development lender can touch in an institution preparing for a redlining exam. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this CRA and Special-Purpose Programs file.

Decision

Community-development lender in an institution preparing for a redlining exam must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using CRA assessment-area versus lending footprint after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• A CRA PE that called the assessment area too narrow is noise around an already-controlled CRA and Special-Purpose Programs process in an institution preparing for a redlining exam, given CRA assessment-area versus lending footprint.
• A CRA PE that called the assessment area too narrow is the event in CRA assessment-area versus lending footprint that forces Remove access or reverse the item for community-development lender under Fair Lending.
• CRA assessment-area versus lending footprint shows a one-file miss after a CRA PE that called the assessment area too narrow, not a CRA and Special-Purpose Programs program failure.
• CRA assessment-area versus lending footprint cannot decide comparative files show second-review yet after a CRA PE that called the assessment area too narrow; hold is the only Fair Lending close an institution preparing for a redlining exam can defend.

Analysis required

• Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a CRA PE that called the assessment area too narrow.
• Flag any disparate-impact table community-development lender cannot explain from CRA assessment-area versus lending footprint.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read CRA assessment-area versus lending footprint against a CRA PE that called the assessment area too narrow and write the one fact that would move comparative files show second-review for community-development lender.

Recommendation