Assess whether a redlining pattern exists after controls from mortgage

Situation

After a notice that cites 'other' as the principal reason 40% of the time, mortgage pricing residual by prohibited-basis group is what adverse-action notice operations lead can touch in a credit union rolling out a special-purpose credit program. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Pricing and Credit Limits file.

Decision

Adverse-action notice operations lead 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 mortgage pricing residual by prohibited-basis group after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• Authorize Remove access or reverse the item now; mortgage pricing residual by prohibited-basis group already has the discriminator after a notice that cites 'other' as the principal reason 40% of the time.
• Keep Temporary compensating control in force until mortgage pricing residual by prohibited-basis group is completed after a notice that cites 'other' as the principal reason 40% of the time for adverse-action notice operations lead.
• Treat mortgage pricing residual by prohibited-basis group as Approve a documented exception because both readings appear after a notice that cites 'other' as the principal reason 40% of the time.
• Refuse a Fair Lending close: adverse-action notice operations lead does not have the page a redlining pattern exists turns on in mortgage pricing residual by prohibited-basis group.

Analysis required

• Match the adverse-action language to the facts in mortgage pricing residual by prohibited-basis group.
• Check HMDA coding and underwriting policy against a redlining pattern exists.
• Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• For this Fair Lending Pricing and Credit Limits file, read mortgage pricing residual by prohibited-basis group 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 adverse-action notice operations lead.

Recommendation