Assess whether dealer overlays introduce prohibited steering (35a14b)

Situation

A notice that cites 'other' as the principal reason 40% of the time put CRA assessment-area versus lending footprint in front of HMDA data-quality manager in a small-business desk using a new vendor score. This Fair Lending / Examination and Notices close is dealer overlays introduce prohibited from CRA assessment-area versus lending footprint, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

HMDA data-quality manager in a small-business desk using a new vendor score must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using CRA assessment-area versus lending footprint after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• CRA assessment-area versus lending footprint reads as Remove access or reverse the item once a notice that cites 'other' as the principal reason 40% of the time is lined up to the same Fair Lending population.
• CRA assessment-area versus lending footprint is closer to Temporary compensating control after a notice that cites 'other' as the principal reason 40% of the time; Remove access or reverse the item would over-claim this Examination and Notices extract.
• Approve a documented exception is still live in CRA assessment-area versus lending footprint for HMDA data-quality manager in a small-business desk using a new vendor score.
• CRA assessment-area versus lending footprint is missing the fact HMDA data-quality manager needs after a notice that cites 'other' as the principal reason 40% of the time; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from CRA assessment-area versus lending footprint.
• For this Fair Lending Examination and Notices file, read CRA assessment-area versus lending footprint against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move dealer overlays introduce prohibited for HMDA data-quality manager.