Assess whether dealer overlays introduce prohibited steering (1b7d76)

Situation

The Redlining and HMDA Data desk packet is adverse-action notice principal-reason sample after a HMDA resubmission that still fails quality edits. Second-review underwriter in a small-business desk using a new vendor score must name Remove access or reverse the item or Temporary compensating control for this Fair Lending file. Second-review underwriter in a small-business desk using a new vendor score has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data file.

Decision

Second-review underwriter in a small-business desk using a new vendor score must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• Adverse-action notice principal-reason sample reads as Remove access or reverse the item once a HMDA resubmission that still fails quality edits is lined up to the same Fair Lending population.
• Adverse-action notice principal-reason sample is closer to Temporary compensating control after a HMDA resubmission that still fails quality edits; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in adverse-action notice principal-reason sample for second-review underwriter in a small-business desk using a new vendor score.
• Adverse-action notice principal-reason sample is missing the fact second-review underwriter needs after a HMDA resubmission that still fails quality edits; stop this Fair Lending close.

Analysis required

• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• For this Fair Lending Redlining and HMDA Data file, read adverse-action notice principal-reason sample against a HMDA resubmission that still fails quality edits and write the one fact that would move dealer overlays introduce prohibited for second-review underwriter.

Recommendation