Assess whether dealer overlays introduce prohibited steering (b1a16c)

Situation

The desk packet is HMDA LAR validity and quality edits after an underwriter chat that used coded language. CRA strategist in an institution preparing for a redlining exam has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data file.

Decision

CRA strategist in an institution preparing for a redlining exam must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using HMDA LAR validity and quality edits after an underwriter chat that used coded language.

Hypotheses to test

• An underwriter chat that used coded language is noise around an already-controlled Redlining and HMDA Data process in an institution preparing for a redlining exam, given HMDA LAR validity and quality edits.
• An underwriter chat that used coded language is the event in HMDA LAR validity and quality edits that forces Remove access or reverse the item for CRA strategist under Fair Lending.
• HMDA LAR validity and quality edits shows a one-file miss after an underwriter chat that used coded language, not a Redlining and HMDA Data program failure.
• HMDA LAR validity and quality edits cannot decide dealer overlays introduce prohibited yet after an underwriter chat that used coded language; hold is the only Fair Lending close an institution preparing for a redlining exam can defend.

Analysis required

• Flag any disparate-impact table CRA strategist cannot explain from HMDA LAR validity and quality edits.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• Match the adverse-action language to the facts in HMDA LAR validity and quality edits.
• For this Fair Lending Redlining and HMDA Data file, read HMDA LAR validity and quality edits against an underwriter chat that used coded language 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 / Redlining and HMDA Data packet (HMDA LAR validity and quality edits after an underwriter chat that used coded language). Lead with the Fair Lending option HMDA LAR validity and quality edits can support after an underwriter chat that used coded language, then the two facts that force it, then the Monday action for CRA strategist in an institution preparing for a redlining exam.