Assess whether comparative files show second-review bias (8ba7a1)

Situation

In a bank with thin HMDA LAR quality, HMDA LAR validity and quality edits is the evidence after an exception rate twice as high for one group after credit controls. Fair-lending officer has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending CRA and Special-Purpose Programs close using HMDA LAR validity and quality edits.

Decision

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

Hypotheses to test

• Fair-lending officer can defend Remove access or reverse the item from HMDA LAR validity and quality edits after an exception rate twice as high for one group after credit controls in a Fair Lending challenge.
• Fair-lending officer cannot defend Remove access or reverse the item from HMDA LAR validity and quality edits; Temporary compensating control is what the extract actually supports after an exception rate twice as high for one group after credit controls.
• An exception rate twice as high for one group after credit controls never reached the population in HMDA LAR validity and quality edits — reopen intake, do not close comparative files show second-review.
• Two facts in HMDA LAR validity and quality edits after an exception rate twice as high for one group after credit controls conflict for fair-lending officer; hold this CRA and Special-Purpose Programs file.

Analysis required

• Match the adverse-action language to the facts in HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against comparative files show second-review.
• 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.
• 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 comparative files show second-review for fair-lending officer.

Recommendation