Assess whether HMDA data can be relied on for the exam (b6954a)

Situation

HMDA data can be relied on sits with second-review underwriter because a SPCP that originated almost no loans to the intended class hit a credit union rolling out a special-purpose credit program. Evidence is small-business decline comparative file set; write the Fair Lending Examination and Notices option that extract can carry.

Decision

Second-review underwriter 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 small-business decline comparative file set after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Authorize Remove access or reverse the item now; small-business decline comparative file set already has the discriminator after a SPCP that originated almost no loans to the intended class.
• Keep Temporary compensating control in force until small-business decline comparative file set is completed after a SPCP that originated almost no loans to the intended class for second-review underwriter.
• Treat small-business decline comparative file set as Approve a documented exception because both readings appear after a SPCP that originated almost no loans to the intended class.
• Refuse a Fair Lending close: second-review underwriter does not have the page HMDA data can be relied on turns on in small-business decline comparative file set.

Analysis required

• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• Match the adverse-action language to the facts in small-business decline comparative file set.
• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• For this Fair Lending Examination and Notices file, read small-business decline comparative file set against a SPCP that originated almost no loans to the intended class and write the one fact that would move HMDA data can be relied on for second-review underwriter.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (small-business decline comparative file set after a SPCP that originated almost no loans to the intended class). The follow-on Examination and Notices action is what second-review underwriter does next: implement the option, assign an owner, and log the missing fact.