Assess whether pricing disparities are justified by legitimate factors

SITUATION An underwriter chat that used coded language put credit-card limit assignment disparity table in front of model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program. This Fair Lending / Redlining and HMDA Data close is pricing disparities are justified from credit-card limit assignment disparity table, 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 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 an underwriter chat that used coded language.

HYPOTHESES TO TEST 1. Credit-card limit assignment disparity table reads as Remove access or reverse the item once an underwriter chat that used coded language is lined up to the same Fair Lending population. 2. Credit-card limit assignment disparity table is closer to Temporary compensating control after an underwriter chat that used coded language; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract. 3. Approve a documented exception is still live in credit-card limit assignment disparity table for model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program. 4. Credit-card limit assignment disparity table is missing the fact model-risk partner for credit scoring needs after an underwriter chat that used coded language; stop this Fair Lending close.

ANALYSIS REQUIRED 1. Check HMDA coding and underwriting policy against pricing disparities are justified. 2. Compare credit-card limit assignment disparity table to similarly situated files, second-review notes, and reason codes after an underwriter chat that used coded language. 3. Flag any disparate-impact table model-risk partner for credit scoring cannot explain from credit-card limit assignment disparity table. 4. For this Fair Lending Redlining and HMDA Data file, read credit-card limit assignment disparity table against an underwriter chat that used coded language 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 (credit-card limit assignment disparity table after an underwriter chat that used coded language). 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.