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#2160334 - 01/12/18 11:46 AM New Product
Brightside3277 Offline
Member

Registered: 08/20/12
Posts: 50
Loc: Oklahoma
We are looking to roll out a new consumer retail product on motor homes. It would be only be available to consumers with a credit score of 725 or higher. What fair lending concerns could you foresee with this?
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Fair Lending
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#2170664 - 03/28/18 01:40 PM Re: New Product [Re: Brightside3277]
InFairness, CRCM Offline
100 Club

Registered: 11/01/10
Posts: 244
Loc: USA
725 is a fairly high FICO cut-off, and may exclude more minority borrowers than non-minority borrowers.
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Opinions are strictly my own, and have nothing to do with my employer.

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#2170694 - 03/28/18 03:05 PM Re: New Product [Re: Brightside3277]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 67859
Loc: Galveston, TX
It would be only be available to consumers with a credit score of 725 or higher.

Is this a number that someone pulled out of their hat or is there empirical data to point to for this cut-off?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2170757 - 03/28/18 08:48 PM Re: New Product [Re: Brightside3277]
Rocky P Offline
Power Poster

Registered: 06/24/03
Posts: 6681
Loc: Florida
Look at both prior responses. Motor homes by their nature are expensive and could exclude protected class applicants because of income and credit, at a substantially higher rate than [being blunt] white applicants. The 725 is high.

Besides documenting the reason for the high credit score, I would identify why the bank wants to get into this specialized market. Prepare the analysis to answer the question of what would prevent an attorney from criticizing the bank for coming up with loan products like yours solely because they do not want to lend to minorities.
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