Assess whether dealer overlays introduce prohibited steering (3c3244)

Situation

Dealer overlays introduce prohibited sits with HMDA data-quality manager because a branch that stopped taking applications in one ZIP hit a small-business desk using a new vendor score. Evidence is underwriting exception log by branch; write the Fair Lending Examination and Notices option that extract can carry.

Decision

HMDA data-quality manager 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 underwriting exception log by branch after a branch that stopped taking applications in one ZIP.

Hypotheses to test

• A branch that stopped taking applications in one ZIP is noise around an already-controlled Examination and Notices process in a small-business desk using a new vendor score, given underwriting exception log by branch.
• A branch that stopped taking applications in one ZIP is the event in underwriting exception log by branch that forces Remove access or reverse the item for HMDA data-quality manager under Fair Lending.
• Underwriting exception log by branch shows a one-file miss after a branch that stopped taking applications in one ZIP, not a Examination and Notices program failure.
• Underwriting exception log by branch cannot decide dealer overlays introduce prohibited yet after a branch that stopped taking applications in one ZIP; hold is the only Fair Lending close a small-business desk using a new vendor score can defend.

Analysis required

• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare underwriting exception log by branch to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from underwriting exception log by branch.
• For this Fair Lending Examination and Notices file, read underwriting exception log by branch against a branch that stopped taking applications in one ZIP and write the one fact that would move dealer overlays introduce prohibited 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 / Examination and Notices packet (underwriting exception log by branch after a branch that stopped taking applications in one ZIP). If underwriting exception log by branch cannot force a Fair Lending label under Examination and Notices, stop. If underwriting exception log by branch after a branch that stopped taking applications in one ZIP cannot support Remove access or reverse the item versus Temporary compensating control on this Fair Lending Examination and Notices close, HMDA data-quality manager must do not infer a control or scheme beyond the transaction and entitlement evidence.