Assess whether a model update needs a fair-lending revalidation (3ad390)

Situation

The desk packet is CRA assessment-area versus lending footprint after a HMDA resubmission that still fails quality edits. Community-development lender in a manufactured-housing lender with dealer-originated files has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Examination and Notices file.

Decision

Community-development lender in a manufactured-housing lender with dealer-originated files must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using CRA assessment-area versus lending footprint after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• Community-development lender can defend Remove access or reverse the item from CRA assessment-area versus lending footprint after a HMDA resubmission that still fails quality edits in a Fair Lending challenge.
• Community-development lender cannot defend Remove access or reverse the item from CRA assessment-area versus lending footprint; Temporary compensating control is what the extract actually supports after a HMDA resubmission that still fails quality edits.
• A HMDA resubmission that still fails quality edits never reached the population in CRA assessment-area versus lending footprint — reopen intake, do not close a model update needs.
• Two facts in CRA assessment-area versus lending footprint after a HMDA resubmission that still fails quality edits conflict for community-development lender; hold this Examination and Notices file.

Analysis required

• Flag any disparate-impact table community-development lender cannot explain from CRA assessment-area versus lending footprint.
• Test a documented exception versus a pattern a manufactured-housing lender with dealer-originated files must defend.
• Match the adverse-action language to the facts in CRA assessment-area versus lending footprint.
• For this Fair Lending Examination and Notices file, read CRA assessment-area versus lending footprint against a HMDA resubmission that still fails quality edits 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 / Examination and Notices packet (CRA assessment-area versus lending footprint after a HMDA resubmission that still fails quality edits). The follow-on Examination and Notices action is what community-development lender does next: implement the option, assign an owner, and log the missing fact.