Assess whether pricing disparities are justified by legitimate factors

SITUATION The working file is HMDA LAR validity and quality edits after a board asking if the bank should settle a matched-pair study. Community-development lender in a manufactured-housing lender with dealer-originated files has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Examination and Notices file.

DECISION Community-development lender in a manufactured-housing lender with dealer-originated files 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 board asking if the bank should settle a matched-pair study.

HYPOTHESES TO TEST 1. Community-development lender can defend Remove access or reverse the item from HMDA LAR validity and quality edits after a board asking if the bank should settle a matched-pair study in a Fair Lending challenge. 2. Community-development lender 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 board asking if the bank should settle a matched-pair study. 3. A board asking if the bank should settle a matched-pair study never reached the population in HMDA LAR validity and quality edits — reopen intake, do not close pricing disparities are justified. 4. Two facts in HMDA LAR validity and quality edits after a board asking if the bank should settle a matched-pair study conflict for community-development lender; hold this Examination and Notices file.

ANALYSIS REQUIRED 1. Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a board asking if the bank should settle a matched-pair study. 2. Flag any disparate-impact table community-development lender cannot explain from HMDA LAR validity and quality edits. 3. Test a documented exception versus a pattern a manufactured-housing lender with dealer-originated files must defend. 4. For this Fair Lending Examination and Notices file, read HMDA LAR validity and quality edits against a board asking if the bank should settle a matched-pair study and write the one fact that would move pricing disparities are justified for community-development lender.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (HMDA LAR validity and quality edits after a board asking if the bank should settle a matched-pair study). The follow-on Examination and Notices action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.