Assess whether comparative files show second-review bias (972735)

Situation

After a SPCP that originated almost no loans to the intended class, small-business decline comparative file set is what model-risk partner for credit scoring can touch in a credit-card issuer changing line-assignment logic. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this CRA and Special-Purpose Programs file.

Decision

Model-risk partner for credit scoring in a credit-card issuer changing line-assignment logic must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using small-business decline comparative file set after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• A SPCP that originated almost no loans to the intended class is noise around an already-controlled CRA and Special-Purpose Programs process in a credit-card issuer changing line-assignment logic, given small-business decline comparative file set.
• A SPCP that originated almost no loans to the intended class is the event in small-business decline comparative file set that forces Remove access or reverse the item for model-risk partner for credit scoring under Fair Lending.
• Small-business decline comparative file set shows a one-file miss after a SPCP that originated almost no loans to the intended class, not a CRA and Special-Purpose Programs program failure.
• Small-business decline comparative file set cannot decide comparative files show second-review yet after a SPCP that originated almost no loans to the intended class; hold is the only Fair Lending close a credit-card issuer changing line-assignment logic can defend.

Analysis required

• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class.
• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from small-business decline comparative file set.
• For this Fair Lending CRA and Special-Purpose Programs file, read small-business decline comparative file set against a SPCP that originated almost no loans to the intended class and write the one fact that would move comparative files show second-review for model-risk partner for credit scoring.