Assess whether a model update needs a fair-lending revalidation (905773)

Situation

The desk packet is SPCP written plan versus actual originations after a HMDA resubmission that still fails quality edits. Second-review underwriter in a small-business desk using a new vendor score has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data file.

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 SPCP written plan versus actual originations after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• Authorize Remove access or reverse the item now; SPCP written plan versus actual originations already has the discriminator after a HMDA resubmission that still fails quality edits.
• Keep Temporary compensating control in force until SPCP written plan versus actual originations is completed after a HMDA resubmission that still fails quality edits for second-review underwriter.
• Treat SPCP written plan versus actual originations 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 SPCP written plan versus actual originations.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare SPCP written plan versus actual originations 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 SPCP written plan versus actual originations.
• For this Fair Lending Redlining and HMDA Data file, read SPCP written plan versus actual originations 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 (SPCP written plan versus actual originations after a HMDA resubmission that still fails quality edits). Lead with the Fair Lending option SPCP written plan versus actual originations can support after a HMDA resubmission that still fails quality edits, then the two facts that force it, then the Monday action for second-review underwriter in a small-business desk using a new vendor score.