Assess whether comparative files show second-review bias (0a20f0)

Situation

Model-risk partner for credit scoring owns comparative files show second-review inside a lender expanding into majority-minority census tracts with HMDA LAR validity and quality edits as the only packet. A board asking if the bank should settle a matched-pair study is what changed the clock for this Fair Lending Examination and Notices file.

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 HMDA LAR validity and quality edits 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 HMDA LAR validity and quality edits.
• A board asking if the bank should settle a matched-pair study is the event in HMDA LAR validity and quality edits that forces Remove access or reverse the item for model-risk partner for credit scoring under Fair Lending.
• HMDA LAR validity and quality edits 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.
• HMDA LAR validity and quality edits 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

• Match the adverse-action language to the facts in HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a board asking if the bank should settle a matched-pair study.
• For this Fair Lending Examination and Notices file, read HMDA LAR validity and quality edits 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.

Recommendation