Assess whether dealer overlays introduce prohibited steering (d85d91)

Situation

Redlining and HMDA Data work in a credit union rolling out a special-purpose credit program now turns on dealer overlays introduce prohibited because a vendor score change with no disparate-impact test put credit-card limit assignment disparity table in play. Model-risk partner for credit scoring should say what credit-card limit assignment disparity table proves.

Decision

Model-risk partner for credit scoring 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 credit-card limit assignment disparity table after a vendor score change with no disparate-impact test.

Hypotheses to test

• Model-risk partner for credit scoring 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.
• Model-risk partner for credit scoring 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 dealer overlays introduce prohibited.
• Two facts in credit-card limit assignment disparity table after a vendor score change with no disparate-impact test conflict for model-risk partner for credit scoring; hold this Redlining and HMDA Data file.

Analysis required

• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from credit-card limit assignment disparity table.
• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• Match the adverse-action language to the facts in credit-card limit assignment disparity table.
• 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 dealer overlays introduce prohibited for model-risk partner for credit scoring.

Recommendation