Redlining Basics

The benefits of automating redlining analysis with technology include:

Shrinking MSA workload and increasing ROI

Regulators are looking beyond originations to include market penetration and denial rates and are putting more onus on lenders to perform self-analysis. An automated analysis tool allows lenders to choose metropolitan statistical areas (MSAs) or counties to assess, focusing their efforts on the highest risk areas.

Comparing data to peers, and acting accordingly

It is important for lenders to know what their data looks like in comparison to other markets and geographies. Automating this process allows lenders to compare selected measures, like LMI vs. non-LMI tracts, view metrics that illustrate significant lending variance in comparison to peer institutions, and discern where a lender is underperforming or over-performing in specific geographic locations.

Digitizing mapping for increased efficiency

Traditionally, lenders placed pins on a map to indicate individual loans. With today’s technology, maps are now digitized to more accurately represent specific loan activities and where they occur, and reveal opportunities for lenders to make more minority and LMI loans. 

Known for his development of compliance reporting and analytics platform, RiskExec, Dr. Anurag Agarwal is an expert in fair lending, HMDA, and CRA. With more than 25 years of experience, Anurag has supported and advised large financial institutions in the areas of compliance, fair lending, statistical analysis, and regulatory risk management.

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