Assess whether HMDA data can be relied on for the exam (987133)

Situation

HMDA data-quality manager in a credit-card issuer changing line-assignment logic has one working extract — appraisal-gap outcomes in majority-minority tracts — after a CRA PE that called the assessment area too narrow. If appraisal-gap outcomes in majority-minority tracts cannot support HMDA data can be relied on, the honest Fair Lending output is hold.

Decision

HMDA data-quality manager in a credit-card issuer changing line-assignment logic 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 CRA PE that called the assessment area too narrow.

Hypotheses to test

• The population in appraisal-gap outcomes in majority-minority tracts is the one a CRA PE that called the assessment area too narrow named, so Remove access or reverse the item follows for this Redlining and HMDA Data file.
• The population in appraisal-gap outcomes in majority-minority tracts is adjacent only to a CRA PE that called the assessment area too narrow; Temporary compensating control is the honest Fair Lending call.
• A credit-card issuer changing line-assignment logic already contained a CRA PE that called the assessment area too narrow before appraisal-gap outcomes in majority-minority tracts arrived; no new Redlining and HMDA Data path.
• Provenance on appraisal-gap outcomes in majority-minority tracts after a CRA PE that called the assessment area too narrow is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Match the adverse-action language to the facts in appraisal-gap outcomes in majority-minority tracts.
• 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 CRA PE that called the assessment area too narrow.
• For this Fair Lending Redlining and HMDA Data file, read appraisal-gap outcomes in majority-minority tracts against a CRA PE that called the assessment area too narrow and write the one fact that would move HMDA data can be relied on for HMDA data-quality manager.

Recommendation