Assess whether HMDA data can be relied on for the exam (cd156b)

Situation

A DOJ or CFPB monitor request for pricing files put geographic application and origination heat map in front of second-review underwriter in a small-business desk using a new vendor score. This Fair Lending / Redlining and HMDA Data close is HMDA data can be relied on from geographic application and origination heat map, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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 geographic application and origination heat map after a DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• Geographic application and origination heat map reads as Remove access or reverse the item once a DOJ or CFPB monitor request for pricing files is lined up to the same Fair Lending population.
• Geographic application and origination heat map is closer to Temporary compensating control after a DOJ or CFPB monitor request for pricing files; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in geographic application and origination heat map for second-review underwriter in a small-business desk using a new vendor score.
• Geographic application and origination heat map is missing the fact second-review underwriter needs after a DOJ or CFPB monitor request for pricing files; stop this Fair Lending close.

Analysis required

• Compare geographic application and origination heat map to similarly situated files, second-review notes, and reason codes after a DOJ or CFPB monitor request for pricing files.
• Flag any disparate-impact table second-review underwriter cannot explain from geographic application and origination heat map.
• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• For this Fair Lending Redlining and HMDA Data file, read geographic application and origination heat map against a DOJ or CFPB monitor request for pricing files and write the one fact that would move HMDA data can be relied on for second-review underwriter.

Recommendation