Assess whether comparative files show second-review bias (419d0f)

Situation

The desk packet is manufactured-housing dealer overlay notes after a SPCP that originated almost no loans to the intended class. Fair-lending officer in an institution preparing for a redlining exam has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Examination and Notices file.

Decision

Fair-lending officer 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 manufactured-housing dealer overlay notes after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• A SPCP that originated almost no loans to the intended class is noise around an already-controlled Examination and Notices process in an institution preparing for a redlining exam, given manufactured-housing dealer overlay notes.
• A SPCP that originated almost no loans to the intended class is the event in manufactured-housing dealer overlay notes that forces Remove access or reverse the item for fair-lending officer under Fair Lending.
• Manufactured-housing dealer overlay notes shows a one-file miss after a SPCP that originated almost no loans to the intended class, not a Examination and Notices program failure.
• Manufactured-housing dealer overlay notes cannot decide comparative files show second-review yet after a SPCP that originated almost no loans to the intended class; hold is the only Fair Lending close an institution preparing for a redlining exam can defend.

Analysis required

• Match the adverse-action language to the facts in manufactured-housing dealer overlay notes.
• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare manufactured-housing dealer overlay notes to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class.
• For this Fair Lending Examination and Notices file, read manufactured-housing dealer overlay notes against a SPCP that originated almost no loans to the intended class and write the one fact that would move comparative files show second-review for fair-lending officer.

Recommendation