Assess whether dealer overlays introduce prohibited steering (b9e4b1)

Situation

Dealer overlays introduce prohibited sits with HMDA data-quality manager because a vendor score change with no disparate-impact test hit a small-business desk using a new vendor score. Evidence is small-business decline comparative file set; write the Fair Lending Examination and Notices option that extract can carry.

Decision

HMDA data-quality manager 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 small-business decline comparative file set after a vendor score change with no disparate-impact test.

Hypotheses to test

• Small-business decline comparative file set reads as Remove access or reverse the item once a vendor score change with no disparate-impact test is lined up to the same Fair Lending population.
• Small-business decline comparative file set is closer to Temporary compensating control after a vendor score change with no disparate-impact test; Remove access or reverse the item would over-claim this Examination and Notices extract.
• Approve a documented exception is still live in small-business decline comparative file set for HMDA data-quality manager in a small-business desk using a new vendor score.
• Small-business decline comparative file set is missing the fact HMDA data-quality manager needs after a vendor score change with no disparate-impact test; stop this Fair Lending close.

Analysis required

• Flag any disparate-impact table HMDA data-quality manager cannot explain from small-business decline comparative file set.
• 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 small-business decline comparative file set.
• For this Fair Lending Examination and Notices file, read small-business decline comparative file set against a vendor score change with no disparate-impact test and write the one fact that would move dealer overlays introduce prohibited 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 / Examination and Notices packet (small-business decline comparative file set after a vendor score change with no disparate-impact test). If small-business decline comparative file set cannot force a Fair Lending label under Examination and Notices, stop. If small-business decline comparative file set after a vendor score change with no disparate-impact test cannot support Remove access or reverse the item versus Temporary compensating control on this Fair Lending Examination and Notices close, HMDA data-quality manager must do not infer a control or scheme beyond the transaction and entitlement evidence.