Assess whether the exam response should concede a finding (fca1d7)

SITUATION A bank with thin HMDA LAR quality cannot treat an exception rate twice as high for one group after credit controls as incidental context on HMDA LAR validity and quality edits. Fair-lending officer must close the exam response should from that extract under Fair Lending / CRA and Special-Purpose Programs.

DECISION Fair-lending officer in a bank with thin HMDA LAR quality 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 exception rate twice as high for one group after credit controls.

HYPOTHESES TO TEST 1. An exception rate twice as high for one group after credit controls is noise around an already-controlled CRA and Special-Purpose Programs process in a bank with thin HMDA LAR quality, given HMDA LAR validity and quality edits. 2. An exception rate twice as high for one group after credit controls is the event in HMDA LAR validity and quality edits that forces Remove access or reverse the item for fair-lending officer under Fair Lending. 3. HMDA LAR validity and quality edits shows a one-file miss after an exception rate twice as high for one group after credit controls, not a CRA and Special-Purpose Programs program failure. 4. HMDA LAR validity and quality edits cannot decide the exam response should yet after an exception rate twice as high for one group after credit controls; hold is the only Fair Lending close a bank with thin HMDA LAR quality can defend.

ANALYSIS REQUIRED 1. Check HMDA coding and underwriting policy against the exam response should. 2. Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls. 3. Flag any disparate-impact table fair-lending officer cannot explain from HMDA LAR validity and quality edits. 4. For this Fair Lending CRA and Special-Purpose Programs file, read HMDA LAR validity and quality edits against an exception rate twice as high for one group after credit controls and write the one fact that would move the exam response should for fair-lending officer.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (HMDA LAR validity and quality edits after an exception rate twice as high for one group after credit controls). The follow-on CRA and Special-Purpose Programs action is what fair-lending officer does next: implement the option, assign an owner, and log the missing fact.

COMMAND RETURNS - Bottom-line Fair Lending option on the exam response should, then the evidence in HMDA LAR validity and quality edits, then the action for fair-lending officer - Hypothesis scorecard against HMDA LAR validity and quality edits: supported / rejected / untestable - Regulatory or exam hook CRA and Special-Purpose Programs would cite - CRA and Special-Purpose Programs finding in HMDA LAR validity and quality edits that a second reviewer can re-perform