Assess whether pricing disparities are justified by legitimate factors

SITUATION Second-review underwriter received appraisal-gap outcomes in majority-minority tracts after a branch that stopped taking applications in one ZIP in a credit union rolling out a special-purpose credit program. Remove access or reverse the item or Temporary compensating control must follow from that extract if the file can settle whether pricing disparities are justified by legitimate factors.

DECISION Second-review underwriter in a credit union rolling out a special-purpose credit program 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 branch that stopped taking applications in one ZIP.

HYPOTHESES TO TEST 1. Appraisal-gap outcomes in majority-minority tracts reads as Remove access or reverse the item once a branch that stopped taking applications in one ZIP is lined up to the same Fair Lending population. 2. Appraisal-gap outcomes in majority-minority tracts is closer to Temporary compensating control after a branch that stopped taking applications in one ZIP; Remove access or reverse the item would over-claim this Examination and Notices extract. 3. Approve a documented exception is still live in appraisal-gap outcomes in majority-minority tracts for second-review underwriter in a credit union rolling out a special-purpose credit program. 4. Appraisal-gap outcomes in majority-minority tracts is missing the fact second-review underwriter needs after a branch that stopped taking applications in one ZIP; stop this Fair Lending close.

ANALYSIS REQUIRED 1. Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend. 2. Match the adverse-action language to the facts in appraisal-gap outcomes in majority-minority tracts. 3. Check HMDA coding and underwriting policy against pricing disparities are justified. 4. For this Fair Lending Examination and Notices file, read appraisal-gap outcomes in majority-minority tracts against a branch that stopped taking applications in one ZIP 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 / Examination and Notices packet (appraisal-gap outcomes in majority-minority tracts after a branch that stopped taking applications in one ZIP). If appraisal-gap outcomes in majority-minority tracts cannot force a Fair Lending label under Examination and Notices, stop. Do not invent missing evidence a credit union rolling out a special-purpose credit program does not have.