Assess whether HMDA data can be relied on for the exam (df3aba)

Situation

A bank with thin HMDA LAR quality cannot treat an exception rate twice as high for one group after credit controls as color commentary on model-reason-code mapping that does not match notices. Fair-lending officer must close HMDA data can be relied on from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

Fair-lending officer 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 model-reason-code mapping that does not match notices after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• Fair-lending officer can defend Remove access or reverse the item from model-reason-code mapping that does not match notices after an exception rate twice as high for one group after credit controls in a Fair Lending challenge.
• Fair-lending officer cannot defend Remove access or reverse the item from model-reason-code mapping that does not match notices; Temporary compensating control is what the extract actually supports after an exception rate twice as high for one group after credit controls.
• An exception rate twice as high for one group after credit controls never reached the population in model-reason-code mapping that does not match notices — reopen intake, do not close HMDA data can be relied on.
• Two facts in model-reason-code mapping that does not match notices after an exception rate twice as high for one group after credit controls conflict for fair-lending officer; hold this CRA and Special-Purpose Programs file.

Analysis required

• Match the adverse-action language to the facts in model-reason-code mapping that does not match notices.
• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• Compare model-reason-code mapping that does not match notices to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls.
• For this Fair Lending CRA and Special-Purpose Programs file, read model-reason-code mapping that does not match notices 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 fair-lending officer.