Assess whether HMDA data can be relied on for the exam after a CRA PE that

Situation

A CRA PE that called the assessment area too narrow put HMDA LAR validity and quality edits in front of exam-response coordinator in an institution preparing for a redlining exam. This Fair Lending / Pricing and Credit Limits close is HMDA data can be relied on from HMDA LAR validity and quality edits, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Exam-response coordinator 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 HMDA LAR validity and quality edits after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• Exam-response coordinator can defend Remove access or reverse the item from HMDA LAR validity and quality edits after a CRA PE that called the assessment area too narrow in a Fair Lending challenge.
• Exam-response coordinator cannot defend Remove access or reverse the item from HMDA LAR validity and quality edits; Temporary compensating control is what the extract actually supports after a CRA PE that called the assessment area too narrow.
• A CRA PE that called the assessment area too narrow never reached the population in HMDA LAR validity and quality edits — reopen intake, do not close HMDA data can be relied on.
• Two facts in HMDA LAR validity and quality edits after a CRA PE that called the assessment area too narrow conflict for exam-response coordinator; hold this Pricing and Credit Limits file.

Analysis required

• 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 HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• For this Fair Lending Pricing and Credit Limits file, read HMDA LAR validity and quality edits 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 exam-response coordinator.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (HMDA LAR validity and quality edits after a CRA PE that called the assessment area too narrow). The follow-on Pricing and Credit Limits action is what exam-response coordinator does next: implement the option, assign an owner, and log the missing fact.