Assess whether a model update needs a fair-lending revalidation (367753)

Situation

A credit union rolling out a special-purpose credit program cannot treat a HMDA resubmission that still fails quality edits as color commentary on geographic application and origination heat map. HMDA data-quality manager must close a model update needs from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

HMDA data-quality manager in a credit union rolling out a special-purpose credit program must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using geographic application and origination heat map after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• HMDA data-quality manager can defend Remove access or reverse the item from geographic application and origination heat map after a HMDA resubmission that still fails quality edits in a Fair Lending challenge.
• HMDA data-quality manager cannot defend Remove access or reverse the item from geographic application and origination heat map; Temporary compensating control is what the extract actually supports after a HMDA resubmission that still fails quality edits.
• A HMDA resubmission that still fails quality edits never reached the population in geographic application and origination heat map — reopen intake, do not close a model update needs.
• Two facts in geographic application and origination heat map after a HMDA resubmission that still fails quality edits conflict for HMDA data-quality manager; hold this CRA and Special-Purpose Programs file.

Analysis required

• Compare geographic application and origination heat map to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from geographic application and origination heat map.
• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read geographic application and origination heat map against a HMDA resubmission that still fails quality edits and write the one fact that would move a model update needs for HMDA data-quality manager.

Recommendation