Assess whether HMDA data can be relied on for the exam (25c2e9)

Situation

In an institution preparing for a redlining exam, appraisal-gap outcomes in majority-minority tracts is the evidence after a branch that stopped taking applications in one ZIP. Fair-lending officer has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Examination and Notices close using appraisal-gap outcomes in majority-minority tracts.

Decision

Fair-lending officer 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 appraisal-gap outcomes in majority-minority tracts after a branch that stopped taking applications in one ZIP.

Hypotheses to test

• Authorize Remove access or reverse the item now; appraisal-gap outcomes in majority-minority tracts already has the discriminator after a branch that stopped taking applications in one ZIP.
• Keep Temporary compensating control in force until appraisal-gap outcomes in majority-minority tracts is completed after a branch that stopped taking applications in one ZIP for fair-lending officer.
• Treat appraisal-gap outcomes in majority-minority tracts as Approve a documented exception because both readings appear after a branch that stopped taking applications in one ZIP.
• Refuse a Fair Lending close: fair-lending officer does not have the page HMDA data can be relied on turns on in appraisal-gap outcomes in majority-minority tracts.

Analysis required

• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• Flag any disparate-impact table fair-lending officer cannot explain from appraisal-gap outcomes in majority-minority tracts.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• For this Fair Lending Examination and Notices file, read appraisal-gap outcomes in majority-minority tracts against a branch that stopped taking applications in one ZIP and write the one fact that would move HMDA data can be relied on for fair-lending officer.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (appraisal-gap outcomes in majority-minority tracts after a branch that stopped taking applications in one ZIP). Lead with the Fair Lending option appraisal-gap outcomes in majority-minority tracts can support after a branch that stopped taking applications in one ZIP, then the two facts that force it, then the Monday action for fair-lending officer in an institution preparing for a redlining exam.