Assess whether a model update needs a fair-lending revalidation (3539e1)

Situation

A small-business desk using a new vendor score cannot treat an underwriter chat that used coded language as color commentary on SPCP written plan versus actual originations. Adverse-action notice operations lead must close a model update needs from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

Adverse-action notice operations lead 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 an underwriter chat that used coded language.

Hypotheses to test

• Adverse-action notice operations lead can defend Remove access or reverse the item from SPCP written plan versus actual originations after an underwriter chat that used coded language in a Fair Lending challenge.
• Adverse-action notice operations lead cannot defend Remove access or reverse the item from SPCP written plan versus actual originations; Temporary compensating control is what the extract actually supports after an underwriter chat that used coded language.
• An underwriter chat that used coded language never reached the population in SPCP written plan versus actual originations — reopen intake, do not close a model update needs.
• Two facts in SPCP written plan versus actual originations after an underwriter chat that used coded language conflict for adverse-action notice operations lead; hold this CRA and Special-Purpose Programs file.

Analysis required

• Compare SPCP written plan versus actual originations to similarly situated files, second-review notes, and reason codes after an underwriter chat that used coded language.
• Flag any disparate-impact table adverse-action notice operations lead cannot explain from SPCP written plan versus actual originations.
• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read SPCP written plan versus actual originations against an underwriter chat that used coded language and write the one fact that would move a model update needs for adverse-action notice operations lead.

Recommendation