Assess whether a redlining pattern exists after controls (0c1ce2)

Situation

Appraisal-gap outcomes in majority-minority tracts arrived with a HMDA resubmission that still fails quality edits for adverse-action notice operations lead. That is a Fair Lending Redlining and HMDA Data decision on a redlining pattern exists in a lender expanding into majority-minority census tracts.

Decision

Adverse-action notice operations lead in a lender expanding into majority-minority census tracts 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

• Appraisal-gap outcomes in majority-minority tracts reads as Remove access or reverse the item once a HMDA resubmission that still fails quality edits is lined up to the same Fair Lending population.
• Appraisal-gap outcomes in majority-minority tracts is closer to Temporary compensating control after a HMDA resubmission that still fails quality edits; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in appraisal-gap outcomes in majority-minority tracts for adverse-action notice operations lead in a lender expanding into majority-minority census tracts.
• Appraisal-gap outcomes in majority-minority tracts is missing the fact adverse-action notice operations lead needs after a HMDA resubmission that still fails quality edits; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against a redlining pattern exists.
• 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 adverse-action notice operations lead cannot explain from appraisal-gap outcomes in majority-minority tracts.
• For this Fair Lending Redlining and HMDA Data 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 a redlining pattern exists for adverse-action notice operations lead.

Recommendation