Assess whether HMDA data can be relied on for the exam (7d6962)

Situation

In an institution preparing for a redlining exam, geographic application and origination heat map is the evidence after a notice that cites 'other' as the principal reason 40% of the time. Community-development lender has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending CRA and Special-Purpose Programs close using geographic application and origination heat map.

Decision

Community-development lender 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 geographic application and origination heat map after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• Geographic application and origination heat map reads as Remove access or reverse the item once a notice that cites 'other' as the principal reason 40% of the time is lined up to the same Fair Lending population.
• Geographic application and origination heat map is closer to Temporary compensating control after a notice that cites 'other' as the principal reason 40% of the time; Remove access or reverse the item would over-claim this CRA and Special-Purpose Programs extract.
• Approve a documented exception is still live in geographic application and origination heat map for community-development lender in an institution preparing for a redlining exam.
• Geographic application and origination heat map is missing the fact community-development lender needs after a notice that cites 'other' as the principal reason 40% of the time; stop this Fair Lending close.

Analysis required

• Flag any disparate-impact table community-development lender cannot explain from geographic application and origination heat map.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• Match the adverse-action language to the facts in geographic application and origination heat map.
• For this Fair Lending CRA and Special-Purpose Programs file, read geographic application and origination heat map against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move HMDA data can be relied on for community-development lender.

Recommendation