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#32897 - 09/16/02 06:28 PM indirect lending: risk base pricing
Anonymous
Unregistered

Our bank is interested in implementing risk base pricing for our indirect lending program (dealer loans). We do not want to implement risk base pricing for our direct lending program. My question is: Are there any fair lending issues with this practice. Thanks

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Lending Compliance
#32898 - 09/16/02 07:40 PM Re: indirect lending: risk base pricing
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,962
Bloomington, IN
You are identifying this as a specific market segment and pricing it accordingly. As long as all applicants in this class are treated equally based on their risk scores, I do not think you have an issue. However, I would monitor it carefully to assure there is no “flipping”, in other words, the best customers are not being “guided” toward the better program.

What do other BOL users think about this?

Out of curiosity, why would you not want to “risk base” price your direct loan program?
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The opinions expressed are mine and they are not to be taken as legal advice.

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