Assess whether HMDA data can be relied on for the exam (fd1e76)

Situation

After a community complaint about appraisal gaps, small-business decline comparative file set is what fair-lending officer can touch in an institution preparing for a redlining exam. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Examination and Notices file.

Decision

Fair-lending officer 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 small-business decline comparative file set after a community complaint about appraisal gaps.

Hypotheses to test

• The population in small-business decline comparative file set is the one a community complaint about appraisal gaps named, so Remove access or reverse the item follows for this Examination and Notices file.
• The population in small-business decline comparative file set is adjacent only to a community complaint about appraisal gaps; Temporary compensating control is the honest Fair Lending call.
• An institution preparing for a redlining exam already contained a community complaint about appraisal gaps before small-business decline comparative file set arrived; no new Examination and Notices path.
• Provenance on small-business decline comparative file set after a community complaint about appraisal gaps is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a community complaint about appraisal gaps.
• Flag any disparate-impact table fair-lending officer cannot explain from small-business decline comparative file set.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• For this Fair Lending Examination and Notices file, read small-business decline comparative file set against a community complaint about appraisal gaps and write the one fact that would move HMDA data can be relied on for fair-lending officer.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (small-business decline comparative file set after a community complaint about appraisal gaps). Lead with the Fair Lending option small-business decline comparative file set can support after a community complaint about appraisal gaps, then the two facts that force it, then the Monday action for fair-lending officer in an institution preparing for a redlining exam.