Assess whether a redlining pattern exists after controls after a HMDA

Situation

The desk packet is geographic application and origination heat map after a HMDA resubmission that still fails quality edits. HMDA data-quality manager in a lender expanding into majority-minority census tracts has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Pricing and Credit Limits file.

Decision

HMDA data-quality manager in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using geographic application and origination heat map after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• A HMDA resubmission that still fails quality edits is noise around an already-controlled Pricing and Credit Limits process in a lender expanding into majority-minority census tracts, given geographic application and origination heat map.
• A HMDA resubmission that still fails quality edits is the event in geographic application and origination heat map that forces Remove access or reverse the item for HMDA data-quality manager under Fair Lending.
• Geographic application and origination heat map shows a one-file miss after a HMDA resubmission that still fails quality edits, not a Pricing and Credit Limits program failure.
• Geographic application and origination heat map cannot decide a redlining pattern exists yet after a HMDA resubmission that still fails quality edits; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Check HMDA coding and underwriting policy against a redlining pattern exists.
• Compare geographic application and origination heat map to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from geographic application and origination heat map.
• For this Fair Lending Pricing and Credit Limits file, read geographic application and origination heat map against a HMDA resubmission that still fails quality edits and write the one fact that would move a redlining pattern exists for HMDA data-quality manager.

Recommendation