Assess whether HMDA data can be relied on for the exam (49ca18)

Situation

Adverse-action notice principal-reason sample arrived with a branch that stopped taking applications in one ZIP for CRA strategist. That is a Fair Lending CRA and Special-Purpose Programs decision on HMDA data can be relied on in a mortgage company after a pricing-regression spike.

Decision

CRA strategist in a mortgage company after a pricing-regression spike must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after a branch that stopped taking applications in one ZIP.

Hypotheses to test

• CRA strategist can defend Remove access or reverse the item from adverse-action notice principal-reason sample after a branch that stopped taking applications in one ZIP in a Fair Lending challenge.
• CRA strategist cannot defend Remove access or reverse the item from adverse-action notice principal-reason sample; Temporary compensating control is what the extract actually supports after a branch that stopped taking applications in one ZIP.
• A branch that stopped taking applications in one ZIP never reached the population in adverse-action notice principal-reason sample — reopen intake, do not close HMDA data can be relied on.
• Two facts in adverse-action notice principal-reason sample after a branch that stopped taking applications in one ZIP conflict for CRA strategist; hold this CRA and Special-Purpose Programs file.

Analysis required

• Compare adverse-action notice principal-reason sample 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 CRA strategist cannot explain from adverse-action notice principal-reason sample.
• Test a documented exception versus a pattern a mortgage company after a pricing-regression spike must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read adverse-action notice principal-reason sample against a branch that stopped taking applications in one ZIP and write the one fact that would move HMDA data can be relied on for CRA strategist.

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 (adverse-action notice principal-reason sample after a branch that stopped taking applications in one ZIP). The follow-on CRA and Special-Purpose Programs action is what CRA strategist does next: implement the option, assign an owner, and log the missing fact.