Assess whether a model update needs a fair-lending revalidation (c11f08)

Situation

In a manufactured-housing lender with dealer-originated files, credit-card limit assignment disparity table is the evidence after an exception rate twice as high for one group after credit controls. Fair-lending officer has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data close using credit-card limit assignment disparity table.

Decision

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

Hypotheses to test

• Fair-lending officer can defend Remove access or reverse the item from credit-card limit assignment disparity table after an exception rate twice as high for one group after credit controls in a Fair Lending challenge.
• Fair-lending officer cannot defend Remove access or reverse the item from credit-card limit assignment disparity table; Temporary compensating control is what the extract actually supports after an exception rate twice as high for one group after credit controls.
• An exception rate twice as high for one group after credit controls never reached the population in credit-card limit assignment disparity table — reopen intake, do not close a model update needs.
• Two facts in credit-card limit assignment disparity table after an exception rate twice as high for one group after credit controls conflict for fair-lending officer; hold this Redlining and HMDA Data file.

Analysis required

• Match the adverse-action language to the facts in credit-card limit assignment disparity table.
• 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 an exception rate twice as high for one group after credit controls.
• For this Fair Lending Redlining and HMDA Data file, read credit-card limit assignment disparity table against an exception rate twice as high for one group after credit controls and write the one fact that would move a model update needs for fair-lending officer.

Recommendation