Assess whether HMDA data can be relied on for the exam (2c7e65)

Situation

A credit union rolling out a special-purpose credit program cannot treat an exception rate twice as high for one group after credit controls as color commentary on HMDA LAR validity and quality edits. HMDA data-quality manager must close HMDA data can be relied on from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

HMDA data-quality manager in a credit union rolling out a special-purpose credit program must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using HMDA LAR validity and quality edits after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• The population in HMDA LAR validity and quality edits 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 HMDA LAR validity and quality edits 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 credit union rolling out a special-purpose credit program already contained an exception rate twice as high for one group after credit controls before HMDA LAR validity and quality edits arrived; no new CRA and Special-Purpose Programs path.
• Provenance on HMDA LAR validity and quality edits 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

• Match the adverse-action language to the facts in HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls.
• For this Fair Lending CRA and Special-Purpose Programs file, read HMDA LAR validity and quality edits against an exception rate twice as high for one group after credit controls and write the one fact that would move HMDA data can be relied on for HMDA data-quality manager.

Recommendation