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#2220527 - 08/27/19 08:13 PM Rate increase for policy exceptions/overrides
MCCompliance Offline
Member
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.
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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
rlcarey
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.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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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
USA
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.
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Opinions are strictly my own, and have nothing to do with my employer.

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