Assess whether HMDA data can be relied on for the exam (546dca)

Situation

After a SPCP that originated almost no loans to the intended class, model-reason-code mapping that does not match notices is what adverse-action notice operations lead can touch in a credit-card issuer changing line-assignment logic. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Examination and Notices file.

Decision

Adverse-action notice operations lead in a credit-card issuer changing line-assignment logic 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 a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• The population in model-reason-code mapping that does not match notices is the one a SPCP that originated almost no loans to the intended class named, so Remove access or reverse the item follows for this Examination and Notices file.
• The population in model-reason-code mapping that does not match notices is adjacent only to a SPCP that originated almost no loans to the intended class; Temporary compensating control is the honest Fair Lending call.
• A credit-card issuer changing line-assignment logic already contained a SPCP that originated almost no loans to the intended class before model-reason-code mapping that does not match notices arrived; no new Examination and Notices path.
• Provenance on model-reason-code mapping that does not match notices after a SPCP that originated almost no loans to the intended class is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• 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 a SPCP that originated almost no loans to the intended class.
• Flag any disparate-impact table adverse-action notice operations lead cannot explain from model-reason-code mapping that does not match notices.
• For this Fair Lending Examination and Notices file, read model-reason-code mapping that does not match notices against a SPCP that originated almost no loans to the intended class and write the one fact that would move HMDA data can be relied on for adverse-action notice operations lead.