Assess whether pricing disparities are justified by legitimate factors

SITUATION The working file is CRA assessment-area versus lending footprint after a marketing mailer that skipped majority-minority tracts. Model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data file.

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 CRA assessment-area versus lending footprint after a marketing mailer that skipped majority-minority tracts.

HYPOTHESES TO TEST 1. A marketing mailer that skipped majority-minority tracts is noise around an already-controlled Redlining and HMDA Data process in a credit union rolling out a special-purpose credit program, given CRA assessment-area versus lending footprint. 2. A marketing mailer that skipped majority-minority tracts is the event in CRA assessment-area versus lending footprint that forces Remove access or reverse the item for model-risk partner for credit scoring under Fair Lending. 3. CRA assessment-area versus lending footprint shows a one-file miss after a marketing mailer that skipped majority-minority tracts, not a Redlining and HMDA Data program failure. 4. CRA assessment-area versus lending footprint cannot decide pricing disparities are justified yet after a marketing mailer that skipped majority-minority tracts; hold is the only Fair Lending close a credit union rolling out a special-purpose credit program can defend.

ANALYSIS REQUIRED 1. Match the adverse-action language to the facts in CRA assessment-area versus lending footprint. 2. Check HMDA coding and underwriting policy against pricing disparities are justified. 3. Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a marketing mailer that skipped majority-minority tracts. 4. For this Fair Lending Redlining and HMDA Data file, read CRA assessment-area versus lending footprint against a marketing mailer that skipped majority-minority tracts and write the one fact that would move pricing disparities are justified for model-risk partner for credit scoring.

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 (CRA assessment-area versus lending footprint after a marketing mailer that skipped majority-minority tracts). The follow-on Redlining and HMDA Data action is what model-risk partner for credit scoring does next: implement the option, assign an owner, and log the missing fact.