Assess whether a model update needs a fair-lending revalidation (091a75)

Situation

In an institution preparing for a redlining exam, adverse-action notice principal-reason sample is the evidence after a CRA PE that called the assessment area too narrow. Community-development lender has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending CRA and Special-Purpose Programs close using adverse-action notice principal-reason sample.

Decision

Community-development lender in an institution preparing for a redlining exam 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 CRA PE that called the assessment area too narrow.

Hypotheses to test

• A CRA PE that called the assessment area too narrow is noise around an already-controlled CRA and Special-Purpose Programs process in an institution preparing for a redlining exam, given adverse-action notice principal-reason sample.
• A CRA PE that called the assessment area too narrow is the event in adverse-action notice principal-reason sample that forces Remove access or reverse the item for community-development lender under Fair Lending.
• Adverse-action notice principal-reason sample shows a one-file miss after a CRA PE that called the assessment area too narrow, not a CRA and Special-Purpose Programs program failure.
• Adverse-action notice principal-reason sample cannot decide a model update needs yet after a CRA PE that called the assessment area too narrow; hold is the only Fair Lending close an institution preparing for a redlining exam can defend.

Analysis required

• Flag any disparate-impact table community-development lender cannot explain from adverse-action notice principal-reason sample.
• Test a documented exception versus a pattern an institution preparing for a redlining exam 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 CRA PE that called the assessment area too narrow and write the one fact that would move a model update needs for community-development lender.

Recommendation