Assess whether the exam response should concede a finding (78426a)

SITUATION Redlining and HMDA Data work in a small-business desk using a new vendor score now turns on the exam response should because a notice that cites 'other' as the principal reason 40% of the time put small-business decline comparative file set in play. Second-review underwriter should say what small-business decline comparative file set proves.

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

HYPOTHESES TO TEST 1. A notice that cites 'other' as the principal reason 40% of the time is noise around an already-controlled Redlining and HMDA Data process in a small-business desk using a new vendor score, given small-business decline comparative file set. 2. A notice that cites 'other' as the principal reason 40% of the time is the event in small-business decline comparative file set that forces Remove access or reverse the item for second-review underwriter under Fair Lending. 3. Small-business decline comparative file set shows a one-file miss after a notice that cites 'other' as the principal reason 40% of the time, not a Redlining and HMDA Data program failure. 4. Small-business decline comparative file set cannot decide the exam response should yet after a notice that cites 'other' as the principal reason 40% of the time; hold is the only Fair Lending close a small-business desk using a new vendor score can defend.

ANALYSIS REQUIRED 1. Match the adverse-action language to the facts in small-business decline comparative file set. 2. Check HMDA coding and underwriting policy against the exam response should. 3. 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. 4. For this Fair Lending Redlining and HMDA Data 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 the exam response should for second-review underwriter.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (small-business decline comparative file set after a notice that cites 'other' as the principal reason 40% of the time). The follow-on Redlining and HMDA Data action is what second-review underwriter does next: implement the option, assign an owner, and log the missing fact.