Assess whether HMDA data can be relied on for the exam (2f2362)

Situation

An exception rate twice as high for one group after credit controls put underwriting exception log by branch 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 underwriting exception log by branch, 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 underwriting exception log by branch after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• An exception rate twice as high for one group after credit controls is noise around an already-controlled Redlining and HMDA Data process in a small-business desk using a new vendor score, given underwriting exception log by branch.
• An exception rate twice as high for one group after credit controls is the event in underwriting exception log by branch that forces Remove access or reverse the item for second-review underwriter under Fair Lending.
• Underwriting exception log by branch shows a one-file miss after an exception rate twice as high for one group after credit controls, not a Redlining and HMDA Data program failure.
• Underwriting exception log by branch cannot decide HMDA data can be relied on yet after an exception rate twice as high for one group after credit controls; hold is the only Fair Lending close a small-business desk using a new vendor score can defend.

Analysis required

• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• Compare underwriting exception log by branch 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 second-review underwriter cannot explain from underwriting exception log by branch.
• For this Fair Lending Redlining and HMDA Data file, read underwriting exception log by branch 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 second-review underwriter.