Assess whether HMDA data can be relied on for the exam (9c1696)

Situation

A vendor score change with no disparate-impact test put manufactured-housing dealer overlay notes in front of exam-response coordinator in a bank with thin HMDA LAR quality. 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

Exam-response coordinator in a bank with thin HMDA LAR quality must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using manufactured-housing dealer overlay notes after a vendor score change with no disparate-impact test.

Hypotheses to test

• The population in manufactured-housing dealer overlay notes is the one a vendor score change with no disparate-impact test named, so Remove access or reverse the item follows for this Redlining and HMDA Data file.
• The population in manufactured-housing dealer overlay notes is adjacent only to a vendor score change with no disparate-impact test; Temporary compensating control is the honest Fair Lending call.
• A bank with thin HMDA LAR quality already contained a vendor score change with no disparate-impact test before manufactured-housing dealer overlay notes arrived; no new Redlining and HMDA Data path.
• Provenance on manufactured-housing dealer overlay notes after a vendor score change with no disparate-impact test is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Test a documented exception versus a pattern a bank with thin HMDA LAR quality 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 a vendor score change with no disparate-impact test 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 / Redlining and HMDA Data packet (manufactured-housing dealer overlay notes after a vendor score change with no disparate-impact test). Lead with the Fair Lending option manufactured-housing dealer overlay notes can support after a vendor score change with no disparate-impact test, then the two facts that force it, then the Monday action for exam-response coordinator in a bank with thin HMDA LAR quality.