CRA strategist must resolve whether a model update needs a fair-lending

Situation

CRA strategist in a manufactured-housing lender with dealer-originated files has one working extract — adverse-action notice principal-reason sample — after a vendor score change with no disparate-impact test. If adverse-action notice principal-reason sample cannot support a model update needs, the honest Fair Lending output is hold.

Decision

CRA strategist 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 adverse-action notice principal-reason sample after a vendor score change with no disparate-impact test.

Hypotheses to test

• Authorize Remove access or reverse the item now; adverse-action notice principal-reason sample already has the discriminator after a vendor score change with no disparate-impact test.
• Keep Temporary compensating control in force until adverse-action notice principal-reason sample is completed after a vendor score change with no disparate-impact test for CRA strategist.
• Treat adverse-action notice principal-reason sample as Approve a documented exception because both readings appear after a vendor score change with no disparate-impact test.
• Refuse a Fair Lending close: CRA strategist does not have the page a model update needs turns on in adverse-action notice principal-reason sample.

Analysis required

• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• Check HMDA coding and underwriting policy against a model update needs.
• Compare adverse-action notice principal-reason sample to similarly situated files, second-review notes, and reason codes after a vendor score change with no disparate-impact test.
• For this Fair Lending Pricing and Credit Limits file, read adverse-action notice principal-reason sample against a vendor score change with no disparate-impact test and write the one fact that would move a model update needs for CRA strategist.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (adverse-action notice principal-reason sample after a vendor score change with no disparate-impact test). The follow-on Pricing and Credit Limits action is what CRA strategist does next: implement the option, assign an owner, and log the missing fact.