Assess whether HMDA data can be relied on for the exam (4e70d2)

Situation

An exception rate twice as high for one group after credit controls put manufactured-housing dealer overlay notes in front of adverse-action notice operations lead in a lender expanding into majority-minority census tracts. This Fair Lending / Redlining and HMDA Data close is HMDA data can be relied on from manufactured-housing dealer overlay notes, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Adverse-action notice operations lead in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using manufactured-housing dealer overlay notes after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• An exception rate twice as high for one group after credit controls is noise around an already-controlled Redlining and HMDA Data process in a lender expanding into majority-minority census tracts, given manufactured-housing dealer overlay notes.
• An exception rate twice as high for one group after credit controls is the event in manufactured-housing dealer overlay notes that forces Remove access or reverse the item for adverse-action notice operations lead under Fair Lending.
• Manufactured-housing dealer overlay notes shows a one-file miss after an exception rate twice as high for one group after credit controls, not a Redlining and HMDA Data program failure.
• Manufactured-housing dealer overlay notes cannot decide HMDA data can be relied on yet after an exception rate twice as high for one group after credit controls; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in manufactured-housing dealer overlay notes.
• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• For this Fair Lending Redlining and HMDA Data file, read manufactured-housing dealer overlay notes against an exception rate twice as high for one group after credit controls and write the one fact that would move HMDA data can be relied on for adverse-action notice operations lead.