Assess whether a model update needs a fair-lending revalidation (5a184b)

Situation

HMDA data-quality manager in a credit-card issuer changing line-assignment logic has one working extract — credit-card limit assignment disparity table — after a vendor score change with no disparate-impact test. If credit-card limit assignment disparity table cannot support a model update needs, the honest Fair Lending output is hold.

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 credit-card limit assignment disparity table after a vendor score change with no disparate-impact test.

Hypotheses to test

• HMDA data-quality manager can defend Remove access or reverse the item from credit-card limit assignment disparity table after a vendor score change with no disparate-impact test in a Fair Lending challenge.
• HMDA data-quality manager 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 a vendor score change with no disparate-impact test.
• A vendor score change with no disparate-impact test 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 a vendor score change with no disparate-impact test conflict for HMDA data-quality manager; 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 a vendor score change with no disparate-impact test.
• For this Fair Lending Redlining and HMDA Data file, read credit-card limit assignment disparity table against a vendor score change with no disparate-impact test and write the one fact that would move a model update needs for HMDA data-quality manager.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (credit-card limit assignment disparity table after a vendor score change with no disparate-impact test). The follow-on Redlining and HMDA Data action is what HMDA data-quality manager does next: implement the option, assign an owner, and log the missing fact.