Banking on success
National City ensures fair mortgage lending and investment practices with SAS^®

The collection of data required by the Home Mortgage Disclosure and Community Reinvestment Acts (HMDA,CRA) has been a perennial challenge for the lending industry. HMDA and CRA data are used internally by banks and externally by regulators and community groups to gauge how effectively the needs of low- and moderate-income communities and customers are being met. Recent revisions to HMDA increased the reporting requirements and only added to the challenge.

Madeleine Thomey, a vice president of regulatory compliance at National City, one of the nation's largest financial institutions, knew her group needed a more efficient process to meet the increasing demands for data. "The 2004 HMDA changes were substantial, and fairly high-profile. More people within the organization were interested in our data, and we were also challenged with ensuring the accuracy of all of the new fields." But with over 1 million customer records, each with hundreds of fields in the original source systems, Thomey's group was doing well just to compile the data. Automating the data collection and analysis was just an idea - until Thomey called SAS.

"SAS has a very good reputation for being accurate and powerful, and I knew SAS had a financial services division," says Thomey. "SAS was interested in developing the kind of product we needed, and our partnership was born."

SAS and National City - based in Cleveland, Ohio, and with banking operations in Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri and Pennsylvania - together developed a compliance solution that features complete data access and integration tools, geocoding, analysis, Web reporting, batch processing and data exploitation.

"SAS' team was willing to listen to our needs and was able to understand them," Thomey says. "Rather than telling us what we needed, they developed an extremely flexible solution, taking all of our needs into account. The schedule was aggressive, and SAS was good at meeting the milestones. We worked closely together to deliver the desired functionality."

Doing what needs to be done
Phase One of the solution included the most critically needed component: data management. "Before we developed our SAS solution, every member of my staff was just compiling the data and going through the data cleansing process," Thomey explains. "We needed to automate the 'heavy lifting' aspects of the data production to free up staff to look at data more critically."

Because SAS' data management capabilities are so "strict and rigorous," Thomey explains, errors are hard to introduce. "That's the real strength of the solution," she adds. "It brings discipline and consistency to the data management process. Since everything is automated, there is no possibility of a forgotten step or of unintentionally affecting records. If you are analyzing your performance, your data needs to be correct. The SAS solution helps ensure that."

The SAS solution has helped National City streamline the error correction process. "As any data manager knows, the best way to prevent errors from entering a system is to reduce the number of times a person needs to touch a record. Our SAS solution provides online error correction, so the person who is closest to the data can make the changes in one spot."

The solution also includes an audit trail, which identifies when a record was changed and by whom. "This has been beneficial. It has reduced research time for the business units, since we are able to zero in on time frames and employees when they come across data they question."

Reaping the benefits
National City has already realized gains from the implementation of the SAS solution. "The most immediate benefit has come from the solution's custom edits feature. It has permitted us to consolidate dozens of reports into a single edit report for each line of business. We have used the time gains to really analyze our data and implement rules for each line of business to ensure their data integrity."

"The SAS solution has really transformed our entire process. We have been able to centralize and automate the data management function, which was previously handled by each individual business unit. Between the online error correction and the ability to export error reports in an electronic format for users without Web access, we have been able to go paperless."

SAS has helped Thomey's group provide value to other areas of the company as well. "Some of the business lines have noticed how quickly we can respond to requests, and they have begun leveraging our data sets and our ability to create custom edits to monitor areas of compliance other than HMDA and CRA."

SAS has also allowed Thomey's group to transition from pure data production to data analysis. National City now relies on the SAS solution that addresses compliance with HMDA, CRA and fair lending regulations, which was launched in March 2005 under the name SAS Fair Banking.

"The first time my primary analyst worked in the ad hoc reporting environment, her eyes went wide. She just couldn't believe she could pull so much information together in a single report," Thomey recalls. "The way she did it before involved running five or six reports, cutting and pasting the data into a spreadsheet, and then performing additional calculations in the spreadsheet."

Those days are gone, Thomey says. Senior managers now have instant access to reports that show income and minority distribution in areas they want to see. Having access to such reporting capabilities can help the bank grow with smart mergers and acquisitions because the company can overlay its own demographic data with that of its peer institutions. "What if" questions can be answered quickly. "We can drill down for detailed geographic information, which was previously labor-intensive," Thomey explains. "We no longer have to rewrite a query to receive a report at a drilled-down level; with the reporting cubes, you just click on the area of interest and the report is generated automatically.

"The SAS solution has increased our analytical ability many times over, while reducing our response time. In many cases, we are able to provide data within minutes. My boss enjoys that part."