CRA Vice President David Skanderson and Joe Garrett and Mike McAuley of Garrett, McAuley & Co., performed a benchmarking survey to gather some systematic information about lender approaches to fair lending risk. In this paper, the authors discuss the results of the survey and the conclusions drawn from it about the current state of fair lending risk management with respect to mortgage pricing. A version of this paper appears in the March 2015 issue of Mortgage Banking and can be found here.
What is disparate impact testing?
Disparate impact testing requires quantitatively testing models for fairness with respect to classes of borrowers protected under the Equal Credit Opportunity...