Assess whether a model update needs a fair-lending revalidation (f70386)

Situation

In a small-business desk using a new vendor score, SPCP written plan versus actual originations is the only Examination and Notices extract after a notice that cites 'other' as the principal reason 40% of the time that HMDA data-quality manager can use for a model update needs. HMDA data-quality manager has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Examination and Notices close using SPCP written plan versus actual originations.

Decision

HMDA data-quality manager 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 SPCP written plan versus actual originations after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• Authorize Remove access or reverse the item now; SPCP written plan versus actual originations already has the discriminator after a notice that cites 'other' as the principal reason 40% of the time.
• Keep Temporary compensating control in force until SPCP written plan versus actual originations is completed after a notice that cites 'other' as the principal reason 40% of the time for HMDA data-quality manager.
• Treat SPCP written plan versus actual originations as Approve a documented exception because both readings appear after a notice that cites 'other' as the principal reason 40% of the time.
• Refuse a Fair Lending close: HMDA data-quality manager does not have the page a model update needs turns on in SPCP written plan versus actual originations.

Analysis required

• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• Match the adverse-action language to the facts in SPCP written plan versus actual originations.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending Examination and Notices file, read SPCP written plan versus actual originations against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move a model update needs for HMDA data-quality manager.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (SPCP written plan versus actual originations after a notice that cites 'other' as the principal reason 40% of the time). If SPCP written plan versus actual originations cannot force a Fair Lending label under Examination and Notices, stop. If SPCP written plan versus actual originations after a notice that cites 'other' as the principal reason 40% of the time cannot support Remove access or reverse the item versus Temporary compensating control on this Fair Lending Examination and Notices close, HMDA data-quality manager must do not infer a control or scheme beyond the transaction and entitlement evidence.