Currently my bank has a rate sheet based upon collateral - so, for example, all applicants for a 2019 new vehicle will get the same rate. We use a loan software for consumer loans (non-real estate) that, based upon our underwriting criteria, will provide us with an approve or decline decision. My bank is wanting to charge an extra .50% to customers that are recommended decline, but we provide an underwriting exception to and originate the loan.
Has anyone else had a rate sheet set like this? I am interested in comments related to fair lending issues, auditor comments, etc. that others may have experienced.
My views only.