Assess whether HMDA data can be relied on for the exam (623a26)

Situation

HMDA LAR validity and quality edits arrived with a DOJ or CFPB monitor request for pricing files for community-development lender. That is a Fair Lending CRA and Special-Purpose Programs decision on HMDA data can be relied on in an institution preparing for a redlining exam.

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 HMDA LAR validity and quality edits after a DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• Community-development lender can defend Remove access or reverse the item from HMDA LAR validity and quality edits after a DOJ or CFPB monitor request for pricing files in a Fair Lending challenge.
• Community-development lender 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 DOJ or CFPB monitor request for pricing files.
• A DOJ or CFPB monitor request for pricing files 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 DOJ or CFPB monitor request for pricing files conflict for community-development lender; hold this CRA and Special-Purpose Programs file.

Analysis required

• 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.
• Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a DOJ or CFPB monitor request for pricing files.
• For this Fair Lending CRA and Special-Purpose Programs file, read HMDA LAR validity and quality edits against a DOJ or CFPB monitor request for pricing files and write the one fact that would move HMDA data can be relied on for community-development lender.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (HMDA LAR validity and quality edits after a DOJ or CFPB monitor request for pricing files). The follow-on CRA and Special-Purpose Programs action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.