Assess whether line assignments have a disparate impact the bank will defend

Situation

Second-review underwriter in a small-business desk using a new vendor score has one working extract — SPCP written plan versus actual originations — after a SPCP that originated almost no loans to the intended class. If SPCP written plan versus actual originations cannot support line assignments have a, the honest Fair Lending output is hold.

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 SPCP written plan versus actual originations after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• SPCP written plan versus actual originations reads as Remove access or reverse the item once a SPCP that originated almost no loans to the intended class is lined up to the same Fair Lending population.
• SPCP written plan versus actual originations is closer to Temporary compensating control after a SPCP that originated almost no loans to the intended class; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in SPCP written plan versus actual originations for second-review underwriter in a small-business desk using a new vendor score.
• SPCP written plan versus actual originations is missing the fact second-review underwriter needs after a SPCP that originated almost no loans to the intended class; stop this Fair Lending close.

Analysis required

• Compare SPCP written plan versus actual originations to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class.
• Flag any disparate-impact table second-review underwriter cannot explain from SPCP written plan versus actual originations.
• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• For this Fair Lending Redlining and HMDA Data file, read SPCP written plan versus actual originations against a SPCP that originated almost no loans to the intended class and write the one fact that would move line assignments have a for second-review underwriter.

Recommendation