Assess whether comparative files show second-review bias from small-business

SITUATION A bank with thin HMDA LAR quality cannot treat a notice that cites 'other' as the principal reason 40% of the time as incidental context on small-business decline comparative file set. Community-development lender must close comparative files show second-review from that extract under Fair Lending / Pricing and Credit Limits.

DECISION Community-development lender 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 small-business decline comparative file set after a notice that cites 'other' as the principal reason 40% of the time.

HYPOTHESES TO TEST 1. Authorize Remove access or reverse the item now; small-business decline comparative file set already has the discriminator after a notice that cites 'other' as the principal reason 40% of the time. 2. Keep Temporary compensating control in force until small-business decline comparative file set is completed after a notice that cites 'other' as the principal reason 40% of the time for community-development lender. 3. Treat small-business decline comparative file set as Approve a documented exception because both readings appear after a notice that cites 'other' as the principal reason 40% of the time. 4. Refuse a Fair Lending close: community-development lender does not have the decision comparative files show second-review turns on in small-business decline comparative file set.

ANALYSIS REQUIRED 1. Check HMDA coding and underwriting policy against comparative files show second-review. 2. Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time. 3. Flag any disparate-impact table community-development lender cannot explain from small-business decline comparative file set. 4. For this Fair Lending Pricing and Credit Limits file, read small-business decline comparative file set 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 community-development lender.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (small-business decline comparative file set after a notice that cites 'other' as the principal reason 40% of the time). If small-business decline comparative file set cannot force a Fair Lending label under Pricing and Credit Limits, stop. Do not invent missing evidence a bank with thin HMDA LAR quality does not have.