Representative Engagements

Redlining – Multiyear Business Lending Review

CrossCheck assisted a client by providing analysis of three years of small business lending data to identify potential redlining risk, including potential geographic and demographic gaps in lending patterns concentrated in higher minority geographies. We developed a profile for each of the client’s assessment areas under the Community Reinvestment Act (CRA) that included:

• An overview of the concentration of majority-minority census tracts (MMCT), business demographics, and the competitive environment to provide relevant performance context in the lending market;
• An annotated map of the distribution of the client’s small business origination activity relative to MMCTs and its branch footprint;
• A comparative analysis to identify statistically significant disparities in lending to MMCTs between the client and aggregate small business lending patterns as reported under the CRA; and
• An assessment of residual redlining risk that evaluates statistical disparities after considering relevant mitigating factors, such as competitive factors that influence MMCT penetration or planned initiatives that are expected to enhance performance.

The analysis results and recommendations CrossCheck provided positioned the lender to better ensure compliance with fair lending laws, mitigate risk, improve community relations, and thoroughly prepare for its upcoming CRA exam.