Assess whether comparative files show second-review bias (98d8ef)

Situation

Manufactured-housing dealer overlay notes arrived with a notice that cites 'other' as the principal reason 40% of the time for HMDA data-quality manager. That is a Fair Lending CRA and Special-Purpose Programs decision on comparative files show second-review in a credit union rolling out a special-purpose credit program.

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 manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• Authorize Remove access or reverse the item now; manufactured-housing dealer overlay notes already has the discriminator after a notice that cites 'other' as the principal reason 40% of the time.
• Keep Temporary compensating control in force until manufactured-housing dealer overlay notes is completed after a notice that cites 'other' as the principal reason 40% of the time for HMDA data-quality manager.
• Treat manufactured-housing dealer overlay notes as Approve a documented exception because both readings appear after a notice that cites 'other' as the principal reason 40% of the time.
• Refuse a Fair Lending close: HMDA data-quality manager does not have the page comparative files show second-review turns on in manufactured-housing dealer overlay notes.

Analysis required

• Compare manufactured-housing dealer overlay notes 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 manufactured-housing dealer overlay notes.
• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read manufactured-housing dealer overlay notes against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move comparative files show second-review 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 (manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time). Lead with the Fair Lending option manufactured-housing dealer overlay notes can support after a notice that cites 'other' as the principal reason 40% of the time, then the two facts that force it, then the Monday action for HMDA data-quality manager in a credit union rolling out a special-purpose credit program.