Whether dealer overlays introduce prohibited steering from adverse-action

Situation

After a notice that cites 'other' as the principal reason 40% of the time, adverse-action notice principal-reason sample is what model-risk partner for credit scoring can touch in a small-business desk using a new vendor score. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Pricing and Credit Limits file.

Decision

Model-risk partner for credit scoring 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 adverse-action notice principal-reason sample after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in adverse-action notice principal-reason sample is the one a notice that cites 'other' as the principal reason 40% of the time named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in adverse-action notice principal-reason sample is adjacent only to a notice that cites 'other' as the principal reason 40% of the time; Temporary compensating control is the honest Fair Lending call.
• A small-business desk using a new vendor score already contained a notice that cites 'other' as the principal reason 40% of the time before adverse-action notice principal-reason sample arrived; no new Pricing and Credit Limits path.
• Provenance on adverse-action notice principal-reason sample after a notice that cites 'other' as the principal reason 40% of the time is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Check HMDA coding and underwriting policy against dealer overlays introduce prohibited.
• Compare adverse-action notice principal-reason sample to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from adverse-action notice principal-reason sample.
• For this Fair Lending Pricing and Credit Limits file, read adverse-action notice principal-reason sample against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move dealer overlays introduce prohibited for model-risk partner for credit scoring.