The Exam Response Should Concede a Finding — Bank Thin HMDA

Situation

Pricing and Credit Limits work in a bank with thin HMDA LAR quality now turns on the exam response should because a marketing mailer that skipped majority-minority tracts put CRA assessment-area versus lending footprint in play. Community-development lender should say what CRA assessment-area versus lending footprint proves.

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 CRA assessment-area versus lending footprint after a marketing mailer that skipped majority-minority tracts.

Hypotheses to test

• CRA assessment-area versus lending footprint reads as Remove access or reverse the item once a marketing mailer that skipped majority-minority tracts is lined up to the same Fair Lending population.
• CRA assessment-area versus lending footprint is closer to Temporary compensating control after a marketing mailer that skipped majority-minority tracts; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in CRA assessment-area versus lending footprint for community-development lender in a bank with thin HMDA LAR quality.
• CRA assessment-area versus lending footprint is missing the fact community-development lender needs after a marketing mailer that skipped majority-minority tracts; stop this Fair Lending close.

Analysis required

• Flag any disparate-impact table community-development lender cannot explain from CRA assessment-area versus lending footprint.
• 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 CRA assessment-area versus lending footprint.
• For this Fair Lending Pricing and Credit Limits file, read CRA assessment-area versus lending footprint against a marketing mailer that skipped majority-minority tracts and write the one fact that would move the exam response should 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 (CRA assessment-area versus lending footprint after a marketing mailer that skipped majority-minority tracts). The follow-on Pricing and Credit Limits action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.