Assess whether a redlining pattern exists after controls from HMDA LAR

Situation

After a vendor score change with no disparate-impact test, HMDA LAR validity and quality edits is what community-development lender can touch in a bank with thin HMDA LAR quality. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Pricing and Credit Limits file.

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 HMDA LAR validity and quality edits after a vendor score change with no disparate-impact test.

Hypotheses to test

• HMDA LAR validity and quality edits reads as Remove access or reverse the item once a vendor score change with no disparate-impact test is lined up to the same Fair Lending population.
• HMDA LAR validity and quality edits is closer to Temporary compensating control after a vendor score change with no disparate-impact test; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in HMDA LAR validity and quality edits for community-development lender in a bank with thin HMDA LAR quality.
• HMDA LAR validity and quality edits is missing the fact community-development lender needs after a vendor score change with no disparate-impact test; stop this Fair Lending close.

Analysis required

• Flag any disparate-impact table community-development lender cannot explain from HMDA LAR validity and quality edits.
• Test a documented exception versus a pattern a bank with thin HMDA LAR quality must defend.
• Match the adverse-action language to the facts in HMDA LAR validity and quality edits.
• For this Fair Lending Pricing and Credit Limits file, read HMDA LAR validity and quality edits against a vendor score change with no disparate-impact test and write the one fact that would move a redlining pattern exists for community-development lender.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (HMDA LAR validity and quality edits after a vendor score change with no disparate-impact test). The follow-on Pricing and Credit Limits action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.