Assess whether HMDA data can be relied on for the exam (b8636f)

Situation

HMDA data can be relied on sits with HMDA data-quality manager because a SPCP that originated almost no loans to the intended class hit a credit union rolling out a special-purpose credit program. Evidence is appraisal-gap outcomes in majority-minority tracts; write the Fair Lending CRA and Special-Purpose Programs option that extract can carry.

Decision

HMDA data-quality manager in a credit union rolling out a special-purpose credit program 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 SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Appraisal-gap outcomes in majority-minority tracts reads as Remove access or reverse the item once a SPCP that originated almost no loans to the intended class is lined up to the same Fair Lending population.
• Appraisal-gap outcomes in majority-minority tracts is closer to Temporary compensating control after a SPCP that originated almost no loans to the intended class; Remove access or reverse the item would over-claim this CRA and Special-Purpose Programs extract.
• Approve a documented exception is still live in appraisal-gap outcomes in majority-minority tracts for HMDA data-quality manager in a credit union rolling out a special-purpose credit program.
• Appraisal-gap outcomes in majority-minority tracts is missing the fact HMDA data-quality manager needs after a SPCP that originated almost no loans to the intended class; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from appraisal-gap outcomes in majority-minority tracts.
• For this Fair Lending CRA and Special-Purpose Programs file, read appraisal-gap outcomes in majority-minority tracts against a SPCP that originated almost no loans to the intended class and write the one fact that would move HMDA data can be relied on for HMDA data-quality manager.

Recommendation