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Dangerous discretion

Our senior loan officers are permitted to use discretion in the underwriting or pricing process when dealing with a good customer. Is this okay?

Where there is vague or subjective underwriting criteria, there is a significantly increased possibility of a fair lending violation. Exactly how is a “good customer” defined? And does every loan officer in the bank define it the same way? Is there clear guidance on making exceptions (including credit-score overrides)?

Learn more about Patricia’s webinar Fair Lending Hot Topics - Don't Get Burned!.

First published on 05/15/2016

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