Assess whether line assignments have a disparate impact the bank will defend

Situation

Line assignments have a sits with fair-lending officer because an exception rate twice as high for one group after credit controls hit an institution preparing for a redlining exam. Evidence is model-reason-code mapping that does not match notices; write the Fair Lending Examination and Notices option that extract can carry.

Decision

Fair-lending officer 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 an exception rate twice as high for one group after credit controls.

Hypotheses to test

• Model-reason-code mapping that does not match notices reads as Remove access or reverse the item once an exception rate twice as high for one group after credit controls 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 an exception rate twice as high for one group after credit controls; Remove access or reverse the item would over-claim this Examination and Notices extract.
• Approve a documented exception is still live in model-reason-code mapping that does not match notices for fair-lending officer in an institution preparing for a redlining exam.
• Model-reason-code mapping that does not match notices is missing the fact fair-lending officer needs after an exception rate twice as high for one group after credit controls; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against line assignments have a.
• Compare model-reason-code mapping that does not match notices to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls.
• Flag any disparate-impact table fair-lending officer cannot explain from model-reason-code mapping that does not match notices.
• For this Fair Lending Examination and Notices file, read model-reason-code mapping that does not match notices against an exception rate twice as high for one group after credit controls and write the one fact that would move line assignments have a for fair-lending officer.

Recommendation