Notices Match the Actual Decisioning Reasons — Bank Thin HMDA

Situation

Pricing and Credit Limits work in a bank with thin HMDA LAR quality now turns on notices match the actual because a notice that cites 'other' as the principal reason 40% of the time put CRA assessment-area versus lending footprint in play. Community-development lender should say what CRA assessment-area versus lending footprint proves.

Decision

Community-development lender in a bank with thin HMDA LAR quality must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using CRA assessment-area versus lending footprint after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in CRA assessment-area versus lending footprint is the one a notice that cites 'other' as the principal reason 40% of the time named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in CRA assessment-area versus lending footprint is adjacent only to a notice that cites 'other' as the principal reason 40% of the time; Temporary compensating control is the honest Fair Lending call.
• A bank with thin HMDA LAR quality already contained a notice that cites 'other' as the principal reason 40% of the time before CRA assessment-area versus lending footprint arrived; no new Pricing and Credit Limits path.
• Provenance on CRA assessment-area versus lending footprint after a notice that cites 'other' as the principal reason 40% of the time 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 CRA assessment-area versus lending footprint.
• Check HMDA coding and underwriting policy against notices match the actual.
• Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• For this Fair Lending Pricing and Credit Limits file, read CRA assessment-area versus lending footprint against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move notices match the actual for community-development lender.

Recommendation