Assess whether pricing disparities are justified by legitimate factors

SITUATION A vendor score change with no disparate-impact test put HMDA LAR validity and quality edits in front of adverse-action notice operations lead in a lender expanding into majority-minority census tracts. This Fair Lending / Redlining and HMDA Data close is pricing disparities are justified from HMDA LAR validity and quality edits, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

DECISION Adverse-action notice operations lead in a lender expanding into majority-minority census tracts 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 1. The population in HMDA LAR validity and quality edits is the one a vendor score change with no disparate-impact test named, so Remove access or reverse the item follows for this Redlining and HMDA Data file. 2. The population in HMDA LAR validity and quality edits is adjacent only to a vendor score change with no disparate-impact test; Temporary compensating control is the honest Fair Lending call. 3. A lender expanding into majority-minority census tracts already contained a vendor score change with no disparate-impact test before HMDA LAR validity and quality edits arrived; no new Redlining and HMDA Data path. 4. Provenance on HMDA LAR validity and quality edits after a vendor score change with no disparate-impact test is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

ANALYSIS REQUIRED 1. Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a vendor score change with no disparate-impact test. 2. Flag any disparate-impact table adverse-action notice operations lead cannot explain from HMDA LAR validity and quality edits. 3. Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend. 4. For this Fair Lending Redlining and HMDA Data 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 pricing disparities are justified for adverse-action notice operations lead.

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