Assess whether a model update needs a fair-lending revalidation (e51642)

Situation

Exam-response coordinator in a bank with thin HMDA LAR quality has one working extract — adverse-action notice principal-reason sample — after an underwriter chat that used coded language. Exam-response coordinator in a bank with thin HMDA LAR quality has adverse-action notice principal-reason sample after an underwriter chat that used coded language. If that extract cannot support a model update needs, the honest Fair Lending Redlining and HMDA Data output is hold.

Decision

Exam-response coordinator in a bank with thin HMDA LAR quality must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after an underwriter chat that used coded language.

Hypotheses to test

• An underwriter chat that used coded language is noise around an already-controlled Redlining and HMDA Data process in a bank with thin HMDA LAR quality, given adverse-action notice principal-reason sample.
• An underwriter chat that used coded language is the event in adverse-action notice principal-reason sample that forces Remove access or reverse the item for exam-response coordinator under Fair Lending.
• Adverse-action notice principal-reason sample shows a one-file miss after an underwriter chat that used coded language, not a Redlining and HMDA Data program failure.
• Adverse-action notice principal-reason sample cannot decide a model update needs yet after an underwriter chat that used coded language; hold is the only Fair Lending close a bank with thin HMDA LAR quality can defend.

Analysis required

• 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 an underwriter chat that used coded language.
• Flag any disparate-impact table exam-response coordinator cannot explain from adverse-action notice principal-reason sample.
• For this Fair Lending Redlining and HMDA Data file, read adverse-action notice principal-reason sample against an underwriter chat that used coded language and write the one fact that would move a model update needs for exam-response coordinator.

Recommendation