Assess whether HMDA data can be relied on for the exam (316cfe)

Situation

HMDA data can be relied on sits with second-review underwriter because a DOJ or CFPB monitor request for pricing files hit a small-business desk using a new vendor score. Evidence is adverse-action notice principal-reason sample; write the Fair Lending Redlining and HMDA Data option that extract can carry.

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 DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• Adverse-action notice principal-reason sample reads as Remove access or reverse the item once a DOJ or CFPB monitor request for pricing files is lined up to the same Fair Lending population.
• Adverse-action notice principal-reason sample is closer to Temporary compensating control after a DOJ or CFPB monitor request for pricing files; 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 DOJ or CFPB monitor request for pricing files; 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 HMDA data can be relied on.
• For this Fair Lending Redlining and HMDA Data file, read adverse-action notice principal-reason sample against a DOJ or CFPB monitor request for pricing files and write the one fact that would move HMDA data can be relied on for second-review underwriter.

Recommendation

Release Remove access or reverse the item for this Fair Lending Redlining and HMDA Data file only when adverse-action notice principal-reason sample after a DOJ or CFPB monitor request for pricing files names the fact HMDA data can be relied on requires. Second-review underwriter in a small-business desk using a new vendor score should withhold Remove access or reverse the item while that fact is still a hole in adverse-action notice principal-reason sample.