Assess whether a model update needs a fair-lending revalidation (a85640)

Situation

A small-business desk using a new vendor score cannot treat a HMDA resubmission that still fails quality edits as color commentary on adverse-action notice principal-reason sample. Second-review underwriter must close a model update needs from that extract under Fair Lending / Redlining and HMDA Data.

Decision

Second-review underwriter 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 adverse-action notice principal-reason sample after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• Authorize Remove access or reverse the item now; adverse-action notice principal-reason sample already has the discriminator after a HMDA resubmission that still fails quality edits.
• Keep Temporary compensating control in force until adverse-action notice principal-reason sample is completed after a HMDA resubmission that still fails quality edits for second-review underwriter.
• Treat adverse-action notice principal-reason sample as Approve a documented exception because both readings appear after a HMDA resubmission that still fails quality edits.
• Refuse a Fair Lending close: second-review underwriter does not have the page a model update needs turns on in adverse-action notice principal-reason sample.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare adverse-action notice principal-reason sample to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• Flag any disparate-impact table second-review underwriter cannot explain from adverse-action notice principal-reason sample.
• For this Fair Lending Redlining and HMDA Data file, read adverse-action notice principal-reason sample against a HMDA resubmission that still fails quality edits and write the one fact that would move a model update needs for second-review underwriter.

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 (adverse-action notice principal-reason sample after a HMDA resubmission that still fails quality edits). The follow-on Redlining and HMDA Data action is what second-review underwriter does next: implement the option, assign an owner, and log the missing fact.