Model-risk partner for credit scoring must resolve whether a model update

Situation

A branch that stopped taking applications in one ZIP put CRA assessment-area versus lending footprint in front of model-risk partner for credit scoring in a small-business desk using a new vendor score. This Fair Lending / Pricing and Credit Limits close is a model update needs from CRA assessment-area versus lending footprint, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Model-risk partner for credit scoring in a small-business desk using a new vendor score must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using CRA assessment-area versus lending footprint after a branch that stopped taking applications in one ZIP.

Hypotheses to test

• Model-risk partner for credit scoring can defend Remove access or reverse the item from CRA assessment-area versus lending footprint after a branch that stopped taking applications in one ZIP in a Fair Lending challenge.
• Model-risk partner for credit scoring cannot defend Remove access or reverse the item from CRA assessment-area versus lending footprint; Temporary compensating control is what the extract actually supports after a branch that stopped taking applications in one ZIP.
• A branch that stopped taking applications in one ZIP never reached the population in CRA assessment-area versus lending footprint — reopen intake, do not close a model update needs.
• Two facts in CRA assessment-area versus lending footprint after a branch that stopped taking applications in one ZIP conflict for model-risk partner for credit scoring; hold this Pricing and Credit Limits file.

Analysis required

• Match the adverse-action language to the facts in CRA assessment-area versus lending footprint.
• Check HMDA coding and underwriting policy against a model update needs.
• Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a branch that stopped taking applications in one ZIP.
• For this Fair Lending Pricing and Credit Limits file, read CRA assessment-area versus lending footprint against a branch that stopped taking applications in one ZIP and write the one fact that would move a model update needs for model-risk partner for credit scoring.