Assess whether a model update needs a fair-lending revalidation (27ef8e)

Situation

Second-review underwriter in a credit-card issuer changing line-assignment logic has one working extract — CRA assessment-area versus lending footprint — after a SPCP that originated almost no loans to the intended class. If CRA assessment-area versus lending footprint cannot support a model update needs, the honest Fair Lending output is hold.

Decision

Second-review underwriter in a credit-card issuer changing line-assignment logic 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 SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Second-review underwriter can defend Remove access or reverse the item from CRA assessment-area versus lending footprint after a SPCP that originated almost no loans to the intended class in a Fair Lending challenge.
• Second-review underwriter 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 SPCP that originated almost no loans to the intended class.
• A SPCP that originated almost no loans to the intended class 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 SPCP that originated almost no loans to the intended class conflict for second-review underwriter; hold this Pricing and Credit Limits file.

Analysis required

• Test a documented exception versus a pattern a credit-card issuer changing line-assignment logic must defend.
• 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.
• For this Fair Lending Pricing and Credit Limits file, read CRA assessment-area versus lending footprint against a SPCP that originated almost no loans to the intended class 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 / Pricing and Credit Limits packet (CRA assessment-area versus lending footprint after a SPCP that originated almost no loans to the intended class). If CRA assessment-area versus lending footprint cannot force a Fair Lending label under Pricing and Credit Limits, stop. Do not invent pages a credit-card issuer changing line-assignment logic does not have.