Assess whether a model update needs a fair-lending revalidation (a39c61)

Situation

A small-business desk using a new vendor score cannot treat a vendor score change with no disparate-impact test as color commentary on CRA assessment-area versus lending footprint. Second-review underwriter must close a model update needs from that extract under Fair Lending / Redlining and HMDA Data.

Decision

Second-review underwriter in a small-business desk using a new vendor score 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 vendor score change with no disparate-impact test.

Hypotheses to test

• CRA assessment-area versus lending footprint reads as Remove access or reverse the item once a vendor score change with no disparate-impact test is lined up to the same Fair Lending population.
• CRA assessment-area versus lending footprint is closer to Temporary compensating control after a vendor score change with no disparate-impact test; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in CRA assessment-area versus lending footprint for second-review underwriter in a small-business desk using a new vendor score.
• CRA assessment-area versus lending footprint is missing the fact second-review underwriter needs after a vendor score change with no disparate-impact test; stop this Fair Lending close.

Analysis required

• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• Match the adverse-action language to the facts in CRA assessment-area versus lending footprint.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending Redlining and HMDA Data file, read CRA assessment-area versus lending footprint against a vendor score change with no disparate-impact test and write the one fact that would move a model update needs for second-review underwriter.

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 (CRA assessment-area versus lending footprint after a vendor score change with no disparate-impact test). Lead with the Fair Lending option CRA assessment-area versus lending footprint can support after a vendor score change with no disparate-impact test, then the two facts that force it, then the Monday action for second-review underwriter in a small-business desk using a new vendor score.