Whether pricing disparities are justified by legitimate factors from CRA

Situation

Pricing disparities are justified sits with fair-lending officer because a board asking if the bank should settle a matched-pair study hit a mortgage company after a pricing-regression spike. Evidence is CRA assessment-area versus lending footprint; write the Fair Lending Pricing and Credit Limits option that extract can carry.

Decision

Fair-lending officer in a mortgage company after a pricing-regression spike 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 board asking if the bank should settle a matched-pair study.

Hypotheses to test

• CRA assessment-area versus lending footprint reads as Remove access or reverse the item once a board asking if the bank should settle a matched-pair study is lined up to the same Fair Lending population.
• CRA assessment-area versus lending footprint is closer to Temporary compensating control after a board asking if the bank should settle a matched-pair study; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in CRA assessment-area versus lending footprint for fair-lending officer in a mortgage company after a pricing-regression spike.
• CRA assessment-area versus lending footprint is missing the fact fair-lending officer needs after a board asking if the bank should settle a matched-pair study; stop this Fair Lending close.

Analysis required

• Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a board asking if the bank should settle a matched-pair study.
• Flag any disparate-impact table fair-lending officer cannot explain from CRA assessment-area versus lending footprint.
• Test a documented exception versus a pattern a mortgage company after a pricing-regression spike must defend.
• For this Fair Lending Pricing and Credit Limits file, read CRA assessment-area versus lending footprint against a board asking if the bank should settle a matched-pair study and write the one fact that would move pricing disparities are justified for fair-lending officer.

Recommendation