Whether notices match the actual decisioning reasons from appraisal-gap

Situation

Community-development lender in a bank with thin HMDA LAR quality has one working extract — appraisal-gap outcomes in majority-minority tracts — after a HMDA resubmission that still fails quality edits. If appraisal-gap outcomes in majority-minority tracts cannot support notices match the actual, the honest Fair Lending output is hold.

Decision

Community-development lender 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 appraisal-gap outcomes in majority-minority tracts after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• Authorize Remove access or reverse the item now; appraisal-gap outcomes in majority-minority tracts already has the discriminator after a HMDA resubmission that still fails quality edits.
• Keep Temporary compensating control in force until appraisal-gap outcomes in majority-minority tracts is completed after a HMDA resubmission that still fails quality edits for community-development lender.
• Treat appraisal-gap outcomes in majority-minority tracts as Approve a documented exception because both readings appear after a HMDA resubmission that still fails quality edits.
• Refuse a Fair Lending close: community-development lender does not have the page notices match the actual turns on in appraisal-gap outcomes in majority-minority tracts.

Analysis required

• Check HMDA coding and underwriting policy against notices match the actual.
• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• Flag any disparate-impact table community-development lender cannot explain from appraisal-gap outcomes in majority-minority tracts.
• For this Fair Lending Pricing and Credit Limits file, read appraisal-gap outcomes in majority-minority tracts against a HMDA resubmission that still fails quality edits and write the one fact that would move notices match the actual for community-development lender.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (appraisal-gap outcomes in majority-minority tracts after a HMDA resubmission that still fails quality edits). If appraisal-gap outcomes in majority-minority tracts cannot force a Fair Lending label under Pricing and Credit Limits, stop. Do not invent pages a bank with thin HMDA LAR quality does not have.