Assess whether dealer overlays introduce prohibited steering (580621)

Situation

Model-risk partner for credit scoring owns dealer overlays introduce prohibited inside a lender expanding into majority-minority census tracts with mortgage pricing residual by prohibited-basis group as the only packet. A vendor score change with no disparate-impact test is what changed the clock for this Fair Lending Examination and Notices file.

Decision

Model-risk partner for credit scoring in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using mortgage pricing residual by prohibited-basis group 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 mortgage pricing residual by prohibited-basis group 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 mortgage pricing residual by prohibited-basis group; 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 mortgage pricing residual by prohibited-basis group — reopen intake, do not close dealer overlays introduce prohibited.
• Two facts in mortgage pricing residual by prohibited-basis group after a vendor score change with no disparate-impact test conflict for model-risk partner for credit scoring; hold this Examination and Notices file.

Analysis required

• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from mortgage pricing residual by prohibited-basis group.
• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in mortgage pricing residual by prohibited-basis group.
• For this Fair Lending Examination and Notices file, read mortgage pricing residual by prohibited-basis group 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.