Assess whether HMDA data can be relied on for the exam from mortgage pricing

Situation

In a credit union rolling out a special-purpose credit program, mortgage pricing residual by prohibited-basis group is the evidence after a notice that cites 'other' as the principal reason 40% of the time. Adverse-action notice operations lead has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Pricing and Credit Limits close using mortgage pricing residual by prohibited-basis group.

Decision

Adverse-action notice operations lead 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 mortgage pricing residual by prohibited-basis group after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• A notice that cites 'other' as the principal reason 40% of the time is noise around an already-controlled Pricing and Credit Limits process in a credit union rolling out a special-purpose credit program, given mortgage pricing residual by prohibited-basis group.
• A notice that cites 'other' as the principal reason 40% of the time is the event in mortgage pricing residual by prohibited-basis group that forces Remove access or reverse the item for adverse-action notice operations lead under Fair Lending.
• Mortgage pricing residual by prohibited-basis group shows a one-file miss after a notice that cites 'other' as the principal reason 40% of the time, not a Pricing and Credit Limits program failure.
• Mortgage pricing residual by prohibited-basis group cannot decide HMDA data can be relied on yet after a notice that cites 'other' as the principal reason 40% of the time; hold is the only Fair Lending close a credit union rolling out a special-purpose credit program can defend.

Analysis required

• Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• Flag any disparate-impact table adverse-action notice operations lead cannot explain from mortgage pricing residual by prohibited-basis group.
• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• For this Fair Lending Pricing and Credit Limits file, read mortgage pricing residual by prohibited-basis group against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move HMDA data can be relied on for adverse-action notice operations lead.