Assess whether comparative files show second-review bias (616948)

Situation

HMDA data-quality manager owns comparative files show second-review inside a credit union rolling out a special-purpose credit program with appraisal-gap outcomes in majority-minority tracts as the only packet. A branch that stopped taking applications in one ZIP is what changed the clock for this Fair Lending CRA and Special-Purpose Programs file.

Decision

HMDA data-quality manager in a credit union rolling out a special-purpose credit program 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 branch that stopped taking applications in one ZIP.

Hypotheses to test

• Appraisal-gap outcomes in majority-minority tracts reads as Remove access or reverse the item once a branch that stopped taking applications in one ZIP is lined up to the same Fair Lending population.
• Appraisal-gap outcomes in majority-minority tracts is closer to Temporary compensating control after a branch that stopped taking applications in one ZIP; Remove access or reverse the item would over-claim this CRA and Special-Purpose Programs extract.
• Approve a documented exception is still live in appraisal-gap outcomes in majority-minority tracts for HMDA data-quality manager in a credit union rolling out a special-purpose credit program.
• Appraisal-gap outcomes in majority-minority tracts is missing the fact HMDA data-quality manager needs after a branch that stopped taking applications in one ZIP; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from appraisal-gap outcomes in majority-minority tracts.
• For this Fair Lending CRA and Special-Purpose Programs file, read appraisal-gap outcomes in majority-minority tracts against a branch that stopped taking applications in one ZIP and write the one fact that would move comparative files show second-review for HMDA data-quality manager.

Recommendation