Assess whether dealer overlays introduce prohibited steering (51e343)

Situation

A small-business desk using a new vendor score cannot treat a HMDA resubmission that still fails quality edits as color commentary on HMDA LAR validity and quality edits. Adverse-action notice operations lead must close dealer overlays introduce prohibited from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

Adverse-action notice operations lead in a small-business desk using a new vendor score 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 HMDA resubmission that still fails quality edits.

Hypotheses to test

• Adverse-action notice operations lead can defend Remove access or reverse the item from HMDA LAR validity and quality edits after a HMDA resubmission that still fails quality edits in a Fair Lending challenge.
• Adverse-action notice operations lead 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 a HMDA resubmission that still fails quality edits.
• A HMDA resubmission that still fails quality edits never reached the population in HMDA LAR validity and quality edits — reopen intake, do not close dealer overlays introduce prohibited.
• Two facts in HMDA LAR validity and quality edits after a HMDA resubmission that still fails quality edits conflict for adverse-action notice operations lead; hold this CRA and Special-Purpose Programs file.

Analysis required

• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• Match the adverse-action language to the facts in HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• For this Fair Lending CRA and Special-Purpose Programs file, read HMDA LAR validity and quality edits against a HMDA resubmission that still fails quality edits and write the one fact that would move dealer overlays introduce prohibited for adverse-action notice operations lead.

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 a HMDA resubmission that still fails quality edits). The follow-on CRA and Special-Purpose Programs action is what adverse-action notice operations lead does next: implement the option, assign an owner, and log the missing fact.