Assess whether HMDA data can be relied on for the exam (0b5398)

Situation

Community-development lender owns HMDA data can be relied on inside an institution preparing for a redlining exam with manufactured-housing dealer overlay notes as the only packet. A notice that cites 'other' as the principal reason 40% of the time is what changed the clock for this Fair Lending CRA and Special-Purpose Programs file.

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 manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• Authorize Remove access or reverse the item now; manufactured-housing dealer overlay notes already has the discriminator after a notice that cites 'other' as the principal reason 40% of the time.
• Keep Temporary compensating control in force until manufactured-housing dealer overlay notes is completed after a notice that cites 'other' as the principal reason 40% of the time for community-development lender.
• Treat manufactured-housing dealer overlay notes as Approve a documented exception because both readings appear after a notice that cites 'other' as the principal reason 40% of the time.
• Refuse a Fair Lending close: community-development lender does not have the page HMDA data can be relied on turns on in manufactured-housing dealer overlay notes.

Analysis required

• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• Compare manufactured-housing dealer overlay notes to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• Flag any disparate-impact table community-development lender cannot explain from manufactured-housing dealer overlay notes.
• For this Fair Lending CRA and Special-Purpose Programs file, read manufactured-housing dealer overlay notes 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

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 (manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time). Lead with the Fair Lending option manufactured-housing dealer overlay notes can support after a notice that cites 'other' as the principal reason 40% of the time, then the two facts that force it, then the Monday action for community-development lender in an institution preparing for a redlining exam.