Assess whether comparative files show second-review bias (aabf4b)

Situation

Comparative files show second-review sits with CRA strategist because a SPCP that originated almost no loans to the intended class hit a bank with thin HMDA LAR quality. Evidence is HMDA LAR validity and quality edits; write the Fair Lending Examination and Notices option that extract can carry.

Decision

CRA strategist 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 a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Authorize Remove access or reverse the item now; HMDA LAR validity and quality edits already has the discriminator after a SPCP that originated almost no loans to the intended class.
• Keep Temporary compensating control in force until HMDA LAR validity and quality edits is completed after a SPCP that originated almost no loans to the intended class for CRA strategist.
• Treat HMDA LAR validity and quality edits as Approve a documented exception because both readings appear after a SPCP that originated almost no loans to the intended class.
• Refuse a Fair Lending close: CRA strategist does not have the page comparative files show second-review turns on in HMDA LAR validity and quality edits.

Analysis required

• Test a documented exception versus a pattern a bank with thin HMDA LAR quality must defend.
• 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.
• For this Fair Lending Examination and Notices file, read HMDA LAR validity and quality edits against a SPCP that originated almost no loans to the intended class and write the one fact that would move comparative files show second-review for CRA strategist.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (HMDA LAR validity and quality edits after a SPCP that originated almost no loans to the intended class). The follow-on Examination and Notices action is what CRA strategist does next: implement the option, assign an owner, and log the missing fact.