Assess whether line assignments have a disparate impact the bank will defend

SITUATION The working file is HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time. HMDA data-quality manager in a lender expanding into majority-minority census tracts has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Pricing and Credit Limits file.

DECISION HMDA data-quality manager in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time.

HYPOTHESES TO TEST 1. HMDA data-quality manager can defend Remove access or reverse the item from HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time in a Fair Lending challenge. 2. HMDA data-quality manager cannot defend Remove access or reverse the item from HMDA LAR validity and quality edits; Temporary compensating control is what the extract actually supports after a notice that cites 'other' as the principal reason 40% of the time. 3. A notice that cites 'other' as the principal reason 40% of the time never reached the population in HMDA LAR validity and quality edits — reopen intake, do not close line assignments have a. 4. Two facts in HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time conflict for HMDA data-quality manager; hold this Pricing and Credit Limits file.

ANALYSIS REQUIRED 1. Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time. 2. Flag any disparate-impact table HMDA data-quality manager cannot explain from HMDA LAR validity and quality edits. 3. Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend. 4. For this Fair Lending Pricing and Credit Limits file, read HMDA LAR validity and quality edits against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move line assignments have a for HMDA data-quality manager.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time). The follow-on Pricing and Credit Limits action is what HMDA data-quality manager does next: implement the option, assign an owner, and log the missing fact.