Dealer Overlays Introduce Prohibited Steering

Situation

After a marketing mailer that skipped majority-minority tracts, HMDA LAR validity and quality edits is what CRA strategist can touch in a manufactured-housing lender with dealer-originated files. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Pricing and Credit Limits file.

Decision

CRA strategist 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 marketing mailer that skipped majority-minority tracts.

Hypotheses to test

• The population in HMDA LAR validity and quality edits is the one a marketing mailer that skipped majority-minority tracts named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in HMDA LAR validity and quality edits is adjacent only to a marketing mailer that skipped majority-minority tracts; Temporary compensating control is the honest Fair Lending call.
• A manufactured-housing lender with dealer-originated files already contained a marketing mailer that skipped majority-minority tracts before HMDA LAR validity and quality edits arrived; no new Pricing and Credit Limits path.
• Provenance on HMDA LAR validity and quality edits after a marketing mailer that skipped majority-minority tracts is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Match the adverse-action language to the facts in HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a marketing mailer that skipped majority-minority tracts.
• For this Fair Lending Pricing and Credit Limits file, read HMDA LAR validity and quality edits against a marketing mailer that skipped majority-minority tracts and write the one fact that would move dealer overlays introduce prohibited for CRA strategist.

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 marketing mailer that skipped majority-minority tracts). The follow-on Pricing and Credit Limits action is what CRA strategist does next: implement the option, assign an owner, and log the missing fact.