Assess whether pricing disparities are justified by legitimate factors

SITUATION The working file is credit-card limit assignment disparity table after a CRA PE that called the assessment area too narrow. Model-risk partner for credit scoring in a lender expanding into majority-minority census tracts has to name Remove access or reverse the item or Temporary compensating control 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 credit-card limit assignment disparity table after a CRA PE that called the assessment area too narrow.

HYPOTHESES TO TEST 1. The population in credit-card limit assignment disparity table is the one a CRA PE that called the assessment area too narrow named, so Remove access or reverse the item follows for this Examination and Notices file. 2. The population in credit-card limit assignment disparity table is adjacent only to a CRA PE that called the assessment area too narrow; Temporary compensating control is the honest Fair Lending call. 3. A lender expanding into majority-minority census tracts already contained a CRA PE that called the assessment area too narrow before credit-card limit assignment disparity table arrived; no new Examination and Notices path. 4. Provenance on credit-card limit assignment disparity table after a CRA PE that called the assessment area too narrow is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

ANALYSIS REQUIRED 1. Match the adverse-action language to the facts in credit-card limit assignment disparity table. 2. Check HMDA coding and underwriting policy against pricing disparities are justified. 3. Compare credit-card limit assignment disparity table to similarly situated files, second-review notes, and reason codes after a CRA PE that called the assessment area too narrow. 4. For this Fair Lending Examination and Notices file, read credit-card limit assignment disparity table against a CRA PE that called the assessment area too narrow and write the one fact that would move pricing disparities are justified for model-risk partner for credit scoring.

RECOMMENDATION The actionable close on credit-card limit assignment disparity table is Remove access or reverse the item if a CRA PE that called the assessment area too narrow left a complete Examination and Notices trail; otherwise Temporary compensating control. Model-risk partner for credit scoring should cite the specific line in credit-card limit assignment disparity table that settles pricing disparities are justified before anyone else acts in a lender expanding into majority-minority census tracts.