Category: Fair Lending

Fair Lending

Looking Under The Hood: Do Your Loan Policies Need a Tune-Up?

  A regulatory examination of lending activity, whether fair lending related or safety and soundness, always focuses on data. Data integrity notwithstanding (which is another blog post entirely), such data is a function of (2) things: (1) policies and (2) actual practices. The interaction of these two forces creates the lending data that will be […]

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Fair Lending Pricing Risk: Is There A Storm Coming?

All of us are familiar with the term “perfect storm.”  A perfect storm can be defined as the occurrence of a highly improbable event.   In the context of the perfect storm, the event is improbable because a combination of factors or conditions have to occur or exist either simultaneously or in a particular sequence in […]

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FDIC Continues to Promote Bank Startups

On December 6, the FDIC announced actions to promote a “more transparent, streamlined, and accountable deposit insurance application process” to encourage the establishment of new, or de novo, banks.

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Are My Fair Lending Statistical Regression Results Meaningful?

Your fair-lending regression results indicate a statistically significant disparity… now what? In our last blog post, we discussed the importance of a common-sense approach to statistical analysis. One common error in statistical analysis is to assume that a result is practically meaningful just because a result is statistically different from zero. This in not always […]

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Understanding Statistical Significance

As fair lending analysis becomes increasingly technical, industry practitioners have had to familiarize themselves with the terminology of statistical analysis. Statistical significance is one of the most common and foundational concepts to successfully navigating these new waters. Moreover, it is a concept that, when misunderstood, may result in serious error.

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When to Use a T-score Versus a Z-score in Fair Lending Analysis

  When is it appropriate to use a t-score rather than a z-score? Will the results of fair lending analysis change if I use one rather than the other? These common questions are addressed in this video, the third part of our series reviewing statistical concepts that are fundamental to fair lending analysis. Z-scores and [...] Read More

Fair Lending Statistics 101: How Distributions Are Used in Fair Lending

This is the second video in our series reviewing statistical concepts that are fundamental to fair lending analysis. In the first part of the series, we described a distribution as an approximation of a histogram of data. In this video, we explore how we use our knowledge of distributions in fair lending. Specifically, we explain why [...] Read More

Fair Lending Statistics 101: What is a Distribution?

Fair lending analysis is becoming increasingly technical, which means a basic understanding of statistics is becoming increasingly important. This video is the first in a series of videos aimed at refreshing your memory on - or perhaps teaching you for the first time - statistical concepts that are fundamental to fair lending analysis. We begin [...] Read More

The Importance of Sample Segmentation for Regression Analysis

One of the first questions before beginning any type of statistical analysis is what data are included and how should the sample or samples be formulated and segmented. In previous posts, we have addressed various nuances in regard to regression modeling and how the inappropriate application of regression and modeling techniques to real world issues […]

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Prevalence of Online Mortgage Lending & Fair Lending

The Federal Reserve Bank of New York released in February (2018) a study examining the role of technology-based residential mortgage lending. The report highlights the growth in volume of mortgage lending conducted exclusively over the internet along with other characteristics of this method of service delivery.

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