Assess whether a model update needs a fair-lending revalidation (4a335d)

Situation

After a notice that cites 'other' as the principal reason 40% of the time, appraisal-gap outcomes in majority-minority tracts is what adverse-action notice operations lead can touch in a credit union rolling out a special-purpose credit program. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Pricing and Credit Limits file.

Decision

Adverse-action notice operations lead 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 appraisal-gap outcomes in majority-minority tracts after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in appraisal-gap outcomes in majority-minority tracts is the one a notice that cites 'other' as the principal reason 40% of the time named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in appraisal-gap outcomes in majority-minority tracts is adjacent only to a notice that cites 'other' as the principal reason 40% of the time; Temporary compensating control is the honest Fair Lending call.
• A credit union rolling out a special-purpose credit program already contained a notice that cites 'other' as the principal reason 40% of the time before appraisal-gap outcomes in majority-minority tracts arrived; no new Pricing and Credit Limits path.
• Provenance on appraisal-gap outcomes in majority-minority tracts after a notice that cites 'other' as the principal reason 40% of the time is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Match the adverse-action language to the facts in appraisal-gap outcomes in majority-minority tracts.
• Check HMDA coding and underwriting policy against a model update needs.
• Compare appraisal-gap outcomes in majority-minority tracts to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• For this Fair Lending Pricing and Credit Limits file, read appraisal-gap outcomes in majority-minority tracts against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move a model update needs for adverse-action notice operations lead.