Assess whether HMDA data can be relied on for the exam (e5fa83)

Situation

Adverse-action notice operations lead in a small-business desk using a new vendor score has one working extract — appraisal-gap outcomes in majority-minority tracts — after an exception rate twice as high for one group after credit controls. Adverse-action notice operations lead in a small-business desk using a new vendor score has appraisal-gap outcomes in majority-minority tracts after an exception rate twice as high for one group after credit controls. If that extract cannot support HMDA data can be relied on, the honest Fair Lending CRA and Special-Purpose Programs output is hold.

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 appraisal-gap outcomes in majority-minority tracts after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• The population in appraisal-gap outcomes in majority-minority tracts is the one an exception rate twice as high for one group after credit controls named, so Remove access or reverse the item follows for this CRA and Special-Purpose Programs file.
• The population in appraisal-gap outcomes in majority-minority tracts is adjacent only to an exception rate twice as high for one group after credit controls; Temporary compensating control is the honest Fair Lending call.
• A small-business desk using a new vendor score already contained an exception rate twice as high for one group after credit controls before appraisal-gap outcomes in majority-minority tracts arrived; no new CRA and Special-Purpose Programs path.
• Provenance on appraisal-gap outcomes in majority-minority tracts after an exception rate twice as high for one group after credit controls is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls.
• Flag any disparate-impact table adverse-action notice operations lead cannot explain from appraisal-gap outcomes in majority-minority tracts.
• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.