Assess whether comparative files show second-review bias (5a4347)

Situation

Credit-card limit assignment disparity table arrived with a board asking if the bank should settle a matched-pair study for model-risk partner for credit scoring. That is a Fair Lending Examination and Notices decision on comparative files show second-review in a lender expanding into majority-minority census tracts.

Decision

Model-risk partner for credit scoring in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using credit-card limit assignment disparity table after a board asking if the bank should settle a matched-pair study.

Hypotheses to test

• A board asking if the bank should settle a matched-pair study is noise around an already-controlled Examination and Notices process in a lender expanding into majority-minority census tracts, given credit-card limit assignment disparity table.
• A board asking if the bank should settle a matched-pair study is the event in credit-card limit assignment disparity table that forces Remove access or reverse the item for model-risk partner for credit scoring under Fair Lending.
• Credit-card limit assignment disparity table shows a one-file miss after a board asking if the bank should settle a matched-pair study, not a Examination and Notices program failure.
• Credit-card limit assignment disparity table cannot decide comparative files show second-review yet after a board asking if the bank should settle a matched-pair study; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Compare credit-card limit assignment disparity table to similarly situated files, second-review notes, and reason codes after a board asking if the bank should settle a matched-pair study.
• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from credit-card limit assignment disparity table.
• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• For this Fair Lending Examination and Notices file, read credit-card limit assignment disparity table against a board asking if the bank should settle a matched-pair study and write the one fact that would move comparative files show second-review for model-risk partner for credit scoring.