Assess whether pricing disparities are justified by legitimate factors

SITUATION A credit union rolling out a special-purpose credit program cannot treat an exception rate twice as high for one group after credit controls as incidental context on HMDA LAR validity and quality edits. HMDA data-quality manager must close pricing disparities are justified from that extract under Fair Lending / CRA and Special-Purpose Programs.

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 HMDA LAR validity and quality edits after an exception rate twice as high for one group after credit controls.

HYPOTHESES TO TEST 1. Authorize Remove access or reverse the item now; HMDA LAR validity and quality edits already has the discriminator after an exception rate twice as high for one group after credit controls. 2. Keep Temporary compensating control in force until HMDA LAR validity and quality edits is completed after an exception rate twice as high for one group after credit controls for HMDA data-quality manager. 3. Treat HMDA LAR validity and quality edits as Approve a documented exception because both readings appear after an exception rate twice as high for one group after credit controls. 4. Refuse a Fair Lending close: HMDA data-quality manager does not have the decision pricing disparities are justified turns on in HMDA LAR validity and quality edits.

ANALYSIS REQUIRED 1. Match the adverse-action language to the facts in HMDA LAR validity and quality edits. 2. Check HMDA coding and underwriting policy against pricing disparities are justified. 3. Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls. 4. For this Fair Lending CRA and Special-Purpose Programs file, read HMDA LAR validity and quality edits against an exception rate twice as high for one group after credit controls and write the one fact that would move pricing disparities are justified for HMDA data-quality manager.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (HMDA LAR validity and quality edits after an exception rate twice as high for one group after credit controls). The follow-on CRA and Special-Purpose Programs action is what HMDA data-quality manager does next: implement the option, assign an owner, and log the missing fact.

COMMAND RETURNS - Bottom-line Fair Lending option on pricing disparities are justified, then the evidence in HMDA LAR validity and quality edits, then the action for HMDA data-quality manager - Hypothesis scorecard against HMDA LAR validity and quality edits: supported / rejected / untestable - Regulatory or exam hook CRA and Special-Purpose Programs would cite - CRA and Special-Purpose Programs finding in HMDA LAR validity and quality edits that a second reviewer can re-perform