Assess whether a redlining pattern exists after controls (ed23c3)

Situation

Examination and Notices work in a manufactured-housing lender with dealer-originated files now turns on a redlining pattern exists because a CRA PE that called the assessment area too narrow put adverse-action notice principal-reason sample in play. Community-development lender should say what adverse-action notice principal-reason sample proves.

Decision

Community-development lender in a manufactured-housing lender with dealer-originated files must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• Community-development lender can defend Remove access or reverse the item from adverse-action notice principal-reason sample after a CRA PE that called the assessment area too narrow in a Fair Lending challenge.
• Community-development lender cannot defend Remove access or reverse the item from adverse-action notice principal-reason sample; Temporary compensating control is what the extract actually supports after a CRA PE that called the assessment area too narrow.
• A CRA PE that called the assessment area too narrow never reached the population in adverse-action notice principal-reason sample — reopen intake, do not close a redlining pattern exists.
• Two facts in adverse-action notice principal-reason sample after a CRA PE that called the assessment area too narrow conflict for community-development lender; hold this Examination and Notices file.

Analysis required

• Test a documented exception versus a pattern a manufactured-housing lender with dealer-originated files must defend.
• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• Check HMDA coding and underwriting policy against a redlining pattern exists.
• For this Fair Lending Examination and Notices file, read adverse-action notice principal-reason sample against a CRA PE that called the assessment area too narrow and write the one fact that would move a redlining pattern exists for community-development lender.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (adverse-action notice principal-reason sample after a CRA PE that called the assessment area too narrow). The follow-on Examination and Notices action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.