Assess whether a model update needs a fair-lending revalidation (bdf1ba)

Situation

After a notice that cites 'other' as the principal reason 40% of the time, credit-card limit assignment disparity table is what exam-response coordinator can touch in a manufactured-housing lender with dealer-originated files. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this CRA and Special-Purpose Programs file.

Decision

Exam-response coordinator 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 credit-card limit assignment disparity table after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in credit-card limit assignment disparity table is the one a notice that cites 'other' as the principal reason 40% of the time named, so Remove access or reverse the item follows for this CRA and Special-Purpose Programs file.
• The population in credit-card limit assignment disparity table is adjacent only to a notice that cites 'other' as the principal reason 40% of the time; Temporary compensating control is the honest Fair Lending call.
• A manufactured-housing lender with dealer-originated files already contained a notice that cites 'other' as the principal reason 40% of the time before credit-card limit assignment disparity table arrived; no new CRA and Special-Purpose Programs path.
• Provenance on credit-card limit assignment disparity table after a notice that cites 'other' as the principal reason 40% of the time is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare credit-card limit assignment disparity table to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• Flag any disparate-impact table exam-response coordinator cannot explain from credit-card limit assignment disparity table.
• For this Fair Lending CRA and Special-Purpose Programs file, read credit-card limit assignment disparity table against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move a model update needs for exam-response coordinator.