Assess whether a redlining pattern exists after controls (462361)

Situation

After a branch that stopped taking applications in one ZIP, small-business decline comparative file set is what second-review underwriter 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 Examination and Notices file.

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 small-business decline comparative file set after a branch that stopped taking applications in one ZIP.

Hypotheses to test

• A branch that stopped taking applications in one ZIP is noise around an already-controlled Examination and Notices process in a credit union rolling out a special-purpose credit program, given small-business decline comparative file set.
• A branch that stopped taking applications in one ZIP is the event in small-business decline comparative file set that forces Remove access or reverse the item for second-review underwriter under Fair Lending.
• Small-business decline comparative file set shows a one-file miss after a branch that stopped taking applications in one ZIP, not a Examination and Notices program failure.
• Small-business decline comparative file set cannot decide a redlining pattern exists yet after a branch that stopped taking applications in one ZIP; hold is the only Fair Lending close a credit union rolling out a special-purpose credit program can defend.

Analysis required

• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• Flag any disparate-impact table second-review underwriter cannot explain from small-business decline comparative file set.
• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• For this Fair Lending Examination and Notices file, read small-business decline comparative file set against a branch that stopped taking applications in one ZIP and write the one fact that would move a redlining pattern exists for second-review underwriter.

Recommendation