Assess whether a model update needs a fair-lending revalidation (b8710a)

Situation

A board asking if the bank should settle a matched-pair study put adverse-action notice principal-reason sample in front of HMDA data-quality manager in a credit-card issuer changing line-assignment logic. This Fair Lending / Redlining and HMDA Data close is a model update needs from adverse-action notice principal-reason sample, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

HMDA data-quality manager in a credit-card issuer changing line-assignment logic must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using adverse-action notice principal-reason sample after a board asking if the bank should settle a matched-pair study.

Hypotheses to test

• Adverse-action notice principal-reason sample reads as Remove access or reverse the item once a board asking if the bank should settle a matched-pair study is lined up to the same Fair Lending population.
• Adverse-action notice principal-reason sample is closer to Temporary compensating control after a board asking if the bank should settle a matched-pair study; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in adverse-action notice principal-reason sample for HMDA data-quality manager in a credit-card issuer changing line-assignment logic.
• Adverse-action notice principal-reason sample is missing the fact HMDA data-quality manager needs after a board asking if the bank should settle a matched-pair study; stop this Fair Lending close.

Analysis required

• Flag any disparate-impact table HMDA data-quality manager cannot explain from adverse-action notice principal-reason sample.
• Test a documented exception versus a pattern a credit-card issuer changing line-assignment logic must defend.
• Match the adverse-action language to the facts in adverse-action notice principal-reason sample.
• For this Fair Lending Redlining and HMDA Data file, read adverse-action notice principal-reason sample against a board asking if the bank should settle a matched-pair study and write the one fact that would move a model update needs for HMDA data-quality manager.

Recommendation