Whether a model update needs a fair-lending revalidation from SPCP written

Situation

The desk packet is SPCP written plan versus actual originations after a SPCP that originated almost no loans to the intended class. Adverse-action notice operations lead in a credit union rolling out a special-purpose credit program has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending 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 SPCP written plan versus actual originations after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Adverse-action notice operations lead can defend Remove access or reverse the item from SPCP written plan versus actual originations after a SPCP that originated almost no loans to the intended class in a Fair Lending challenge.
• Adverse-action notice operations lead cannot defend Remove access or reverse the item from SPCP written plan versus actual originations; Temporary compensating control is what the extract actually supports after a SPCP that originated almost no loans to the intended class.
• A SPCP that originated almost no loans to the intended class never reached the population in SPCP written plan versus actual originations — reopen intake, do not close a model update needs.
• Two facts in SPCP written plan versus actual originations after a SPCP that originated almost no loans to the intended class conflict for adverse-action notice operations lead; hold this Pricing and Credit Limits file.

Analysis required

• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• Match the adverse-action language to the facts in SPCP written plan versus actual originations.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending Pricing and Credit Limits file, read SPCP written plan versus actual originations against a SPCP that originated almost no loans to the intended class and write the one fact that would move a model update needs for adverse-action notice operations lead.

Recommendation