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#2220527 - 08/27/19 08:13 PM Rate increase for policy exceptions/overrides
MCCompliance Offline
Joined: Nov 2012
Posts: 95
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.

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Fair Lending
#2220540 - 08/27/19 09:45 PM Re: Rate increase for policy exceptions/overrides MCCompliance
rlcarey Offline
10K Club
Joined: Jul 2001
Posts: 80,341
Galveston, TX
Potential fair lending issues would all be based on the unequal application of such low-side overrides.
The opinions expressed here should not be construed to be those of my employer:

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#2223286 - 10/08/19 03:05 PM Re: Rate increase for policy exceptions/overrides MCCompliance
InFairness, CRCM Offline
Platinum Poster
InFairness, CRCM
Joined: Nov 2010
Posts: 704
Whatever you do needs to be clearly stated in pricing policy or rate sheets and applied evenly. And even then, there is the potential for disparate impact.
Opinions are strictly my own, and have nothing to do with my employer.

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