Assess whether HMDA data can be relied on for the exam (92aff7)

Situation

HMDA data can be relied on sits with CRA strategist because a marketing mailer that skipped majority-minority tracts hit an institution preparing for a redlining exam. Evidence is credit-card limit assignment disparity table; write the Fair Lending Redlining and HMDA Data option that extract can carry.

Decision

CRA strategist 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 credit-card limit assignment disparity table after a marketing mailer that skipped majority-minority tracts.

Hypotheses to test

• An institution preparing for a redlining exam can accept Remove access or reverse the item on HMDA data can be relied on only from credit-card limit assignment disparity table after a marketing mailer that skipped majority-minority tracts, not from a neighboring Redlining and HMDA Data file.
• Temporary compensating control is the reading if credit-card limit assignment disparity table after a marketing mailer that skipped majority-minority tracts fails the Fair Lending test CRA strategist would cite.
• Approve a documented exception stays open while credit-card limit assignment disparity table still contains both Remove access or reverse the item and Temporary compensating control signals.
• Until credit-card limit assignment disparity table after a marketing mailer that skipped majority-minority tracts answers HMDA data can be relied on, CRA strategist should leave the Redlining and HMDA Data close unnamed.

Analysis required

• Compare credit-card limit assignment disparity table to similarly situated files, second-review notes, and reason codes after a marketing mailer that skipped majority-minority tracts.
• Flag any disparate-impact table CRA strategist cannot explain from credit-card limit assignment disparity table.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• For this Fair Lending Redlining and HMDA Data file, read credit-card limit assignment disparity table against a marketing mailer that skipped majority-minority tracts and write the one fact that would move HMDA data can be relied on for CRA strategist.

Recommendation