Assess whether a model update needs a fair-lending revalidation (7104a8)

Situation

Community-development lender owns a model update needs inside an institution preparing for a redlining exam with appraisal-gap outcomes in majority-minority tracts as the only packet. A board asking if the bank should settle a matched-pair study is what changed the clock for this Fair Lending CRA and Special-Purpose Programs file.

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 appraisal-gap outcomes in majority-minority tracts after a board asking if the bank should settle a matched-pair study.

Hypotheses to test

• Community-development lender can defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts after a board asking if the bank should settle a matched-pair study in a Fair Lending challenge.
• Community-development lender cannot defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts; Temporary compensating control is what the extract actually supports after a board asking if the bank should settle a matched-pair study.
• A board asking if the bank should settle a matched-pair study never reached the population in appraisal-gap outcomes in majority-minority tracts — reopen intake, do not close a model update needs.
• Two facts in appraisal-gap outcomes in majority-minority tracts after a board asking if the bank should settle a matched-pair study conflict for community-development lender; hold this CRA and Special-Purpose Programs file.

Analysis required

• 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 appraisal-gap outcomes in majority-minority tracts.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending CRA and Special-Purpose Programs file, read appraisal-gap outcomes in majority-minority tracts against a board asking if the bank should settle a matched-pair study and write the one fact that would move a model update needs for community-development lender.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (appraisal-gap outcomes in majority-minority tracts after a board asking if the bank should settle a matched-pair study). The follow-on CRA and Special-Purpose Programs action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.