Forms of Fair Lending Discrimination: Introduction
In an upcoming series of posts we address types of fair lending discrimination that are commonly recognized by the regulatory and enforcement agencies.
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21Mar2017
16Mar2017
Issues in Regression Modeling For Fair Lending Underwriting Analysis (Part 2 of 2)
In our previous post, we addressed a few frequently encountered issues when using regression methods to conduct a fair lending analysis.
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14Mar2017
Issues in Regression Modeling For Fair Lending Underwriting Analysis (Part 1 of 2)
Evaluating loan application outcomes (approval or denial) in the context of fair lending is referred to as an “underwriting analysis.” Regression modeling is commonly employed in such analyses.
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23Feb2017
Underwriting Analysis for Fair Lending Using Logistic Regression: Odds Ratio vs. Marginal Effects
When conducting fair lending regression analysis of underwriting, we are examining a sample of loan applications that were either approved or denied. The practice is to regress denial (y=1 if denied, 0=approved) on a target group indicator variable and other attributes upon which the loan decision should have been based.
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21Feb2017
To Be Successful in Fair Lending, Lenders Must Discriminate
Several years ago, I began a conference presentation by making the statement: “To be successful at fair lending, you must learn how to properly discriminate.” The statement was obviously meant to be provocative, and it must have worked because it was quite some time before I was invited back (just kidding). The statement, however, is […]
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16Feb2017
Manage Customer Service Perceptions to Lower Fair Lending Risk
In a previous post, we addressed the importance of customer service as a component of managing fair lending risk. While it is important for an institution to have efficient processes in place to facilitate the lending process, equally important is the recognition that business is relationship.
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14Feb2017
Handling Missing Data in Fair Lending Regression Analysis
Missing data is a common problem in econometric analysis in general and fair lending analysis specifically.
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09Feb2017
Improve Customer Service to Lower Fair Lending Risk
A formal complaint filed against a financial institution with a regulatory agency often results in some type of inquiry or investigation of the institution in order to resolve the issue. If the nature of the complaint involves a potential violation of fair lending laws, it can often cause a formal fair lending review of the […]
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07Feb2017
Understanding the 3 Types of Fair Lending Discrimination
Fair lending laws and regulations are broad and cover every phase of the lending transaction. This includes the initial inquiry and loan application process through the servicing and ultimate settlement of the debt. Accordingly, there are nearly an infinite range of possible pressure points that a lender may need to evaluate in order to assess […]
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02Feb2017
Modeling Rate Sheet Variables for Fair Lending Regression Analysis
Most financial institutions have rate sheets that provide pricing guidance for various loan products. Loan pricing is often in the form of a matrix in which the appropriate rate is determined by a combination of two or more values.
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