Assess whether a model update needs a fair-lending revalidation (7b9788)

Situation

Model-reason-code mapping that does not match notices arrived with a branch that stopped taking applications in one ZIP for CRA strategist. That is a Fair Lending Redlining and HMDA Data decision on a model update needs in an institution preparing for a redlining exam.

Decision

CRA strategist 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 model-reason-code mapping that does not match notices after a branch that stopped taking applications in one ZIP.

Hypotheses to test

• Model-reason-code mapping that does not match notices reads as Remove access or reverse the item once a branch that stopped taking applications in one ZIP is lined up to the same Fair Lending population.
• Model-reason-code mapping that does not match notices is closer to Temporary compensating control after a branch that stopped taking applications in one ZIP; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in model-reason-code mapping that does not match notices for CRA strategist in an institution preparing for a redlining exam.
• Model-reason-code mapping that does not match notices is missing the fact CRA strategist needs after a branch that stopped taking applications in one ZIP; stop this Fair Lending close.

Analysis required

• Compare model-reason-code mapping that does not match notices to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• Flag any disparate-impact table CRA strategist cannot explain from model-reason-code mapping that does not match notices.
• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• For this Fair Lending Redlining and HMDA Data file, read model-reason-code mapping that does not match notices against a branch that stopped taking applications in one ZIP 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 / Redlining and HMDA Data packet (model-reason-code mapping that does not match notices after a branch that stopped taking applications in one ZIP). Lead with the Fair Lending option model-reason-code mapping that does not match notices can support after a branch that stopped taking applications in one ZIP, then the two facts that force it, then the Monday action for CRA strategist in an institution preparing for a redlining exam.