Assess whether a redlining pattern exists after controls (1aca1b)

Situation

An exception rate twice as high for one group after credit controls put adverse-action notice principal-reason sample in front of HMDA data-quality manager in a credit union rolling out a special-purpose credit program. This Fair Lending / CRA and Special-Purpose Programs close is a redlining pattern exists from adverse-action notice principal-reason sample, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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 adverse-action notice principal-reason sample after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• Authorize Remove access or reverse the item now; adverse-action notice principal-reason sample already has the discriminator after an exception rate twice as high for one group after credit controls.
• Keep Temporary compensating control in force until adverse-action notice principal-reason sample is completed after an exception rate twice as high for one group after credit controls for HMDA data-quality manager.
• Treat adverse-action notice principal-reason sample as Approve a documented exception because both readings appear after an exception rate twice as high for one group after credit controls.
• Refuse a Fair Lending close: HMDA data-quality manager does not have the page a redlining pattern exists turns on in adverse-action notice principal-reason sample.

Analysis required

• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• Check HMDA coding and underwriting policy against a redlining pattern exists.
• Compare adverse-action notice principal-reason sample 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 adverse-action notice principal-reason sample against an exception rate twice as high for one group after credit controls and write the one fact that would move a redlining pattern exists for HMDA data-quality manager.

Recommendation