When conducting fair lending analysis using HMDA data, which statistical method is most commonly used to identify potential disparate impact discrimination?
Correct Answer
A) Regression analysis controlling for legitimate credit factors
Regression analysis that controls for legitimate, non-discriminatory credit factors is the preferred method for fair lending analysis as it isolates the impact of protected characteristics while accounting for creditworthiness factors, providing more reliable evidence of potential discrimination.
Why This Is the Correct Answer
Regression analysis that controls for legitimate, non-discriminatory credit factors is the preferred method for fair lending analysis as it isolates the impact of protected characteristics while accounting for creditworthiness factors, providing more reliable evidence of potential discrimination.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
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An advertisement states 'Jumbo loans available with interest rates starting at 4.125%.' To be TILA-compliant, what must this rate represent?
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