Assess whether a redlining pattern exists after controls (7ea668)

Situation

A notice that cites 'other' as the principal reason 40% of the time put manufactured-housing dealer overlay notes in front of fair-lending officer in an institution preparing for a redlining exam. This Fair Lending / Examination and Notices close is a redlining pattern exists from manufactured-housing dealer overlay notes, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Fair-lending officer in an institution preparing for a redlining exam must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using manufactured-housing dealer overlay notes 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 an institution preparing for a redlining exam, given manufactured-housing dealer overlay notes.
• A notice that cites 'other' as the principal reason 40% of the time is the event in manufactured-housing dealer overlay notes that forces Remove access or reverse the item for fair-lending officer under Fair Lending.
• Manufactured-housing dealer overlay notes 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.
• Manufactured-housing dealer overlay notes 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 an institution preparing for a redlining exam can defend.

Analysis required

• Flag any disparate-impact table fair-lending officer cannot explain from manufactured-housing dealer overlay notes.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• Match the adverse-action language to the facts in manufactured-housing dealer overlay notes.
• For this Fair Lending Examination and Notices file, read manufactured-housing dealer overlay notes 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 fair-lending officer.

Recommendation