Assess whether a model update needs a fair-lending revalidation (9b4e1c)

Situation

After a notice that cites 'other' as the principal reason 40% of the time, adverse-action notice principal-reason sample is what CRA strategist can touch in a mortgage company after a pricing-regression spike. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this CRA and Special-Purpose Programs file.

Decision

CRA strategist in a mortgage company after a pricing-regression spike must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in adverse-action notice principal-reason sample 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 CRA and Special-Purpose Programs file.
• The population in adverse-action notice principal-reason sample 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 mortgage company after a pricing-regression spike already contained a notice that cites 'other' as the principal reason 40% of the time before adverse-action notice principal-reason sample arrived; no new CRA and Special-Purpose Programs path.
• Provenance on adverse-action notice principal-reason sample 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

• Flag any disparate-impact table CRA strategist cannot explain from adverse-action notice principal-reason sample.
• Test a documented exception versus a pattern a mortgage company after a pricing-regression spike must defend.
• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• For this Fair Lending CRA and Special-Purpose Programs file, read adverse-action notice principal-reason sample 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 CRA strategist.

Recommendation