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.

Potential fair lending issues would all be based on the unequal application of such low-side overrides.

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.