Assess whether a redlining pattern exists after controls (4b5198)

Situation

A bank with thin HMDA LAR quality cannot treat an exception rate twice as high for one group after credit controls as color commentary on manufactured-housing dealer overlay notes. Fair-lending officer must close a redlining pattern exists from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

Fair-lending officer 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 manufactured-housing dealer overlay notes 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 CRA and Special-Purpose Programs process in a bank with thin HMDA LAR quality, given manufactured-housing dealer overlay notes.
• An exception rate twice as high for one group after credit controls is the event in manufactured-housing dealer overlay notes that forces Remove access or reverse the item for fair-lending officer under Fair Lending.
• Manufactured-housing dealer overlay notes shows a one-file miss after an exception rate twice as high for one group after credit controls, not a CRA and Special-Purpose Programs program failure.
• Manufactured-housing dealer overlay notes cannot decide a redlining pattern exists yet after an exception rate twice as high for one group after credit controls; hold is the only Fair Lending close a bank with thin HMDA LAR quality can defend.

Analysis required

• Compare manufactured-housing dealer overlay notes 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 fair-lending officer cannot explain from manufactured-housing dealer overlay notes.
• Test a documented exception versus a pattern a bank with thin HMDA LAR quality must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read manufactured-housing dealer overlay notes 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 fair-lending officer.

Recommendation