Assess whether a redlining pattern exists after controls (4ceaf7)

Situation

A notice that cites 'other' as the principal reason 40% of the time put CRA assessment-area versus lending footprint in front of second-review underwriter in a credit union rolling out a special-purpose credit program. This Fair Lending / Examination and Notices close is a redlining pattern exists from CRA assessment-area versus lending footprint, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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 CRA assessment-area versus lending footprint after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• A notice that cites 'other' as the principal reason 40% of the time is noise around an already-controlled Examination and Notices process in a credit union rolling out a special-purpose credit program, given CRA assessment-area versus lending footprint.
• A notice that cites 'other' as the principal reason 40% of the time is the event in CRA assessment-area versus lending footprint that forces Remove access or reverse the item for second-review underwriter under Fair Lending.
• CRA assessment-area versus lending footprint shows a one-file miss after a notice that cites 'other' as the principal reason 40% of the time, not a Examination and Notices program failure.
• CRA assessment-area versus lending footprint cannot decide a redlining pattern exists yet after a notice that cites 'other' as the principal reason 40% of the time; hold is the only Fair Lending close a credit union rolling out a special-purpose credit program can defend.

Analysis required

• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• Match the adverse-action language to the facts in CRA assessment-area versus lending footprint.
• Check HMDA coding and underwriting policy against a redlining pattern exists.
• For this Fair Lending Examination and Notices file, read CRA assessment-area versus lending footprint against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move a redlining pattern exists for second-review underwriter.