Model-risk partner for credit scoring must resolve whether the exam response

Situation

CRA assessment-area versus lending footprint arrived with a SPCP that originated almost no loans to the intended class for model-risk partner for credit scoring. That is a Fair Lending Pricing and Credit Limits decision on the exam response should in a small-business desk using a new vendor score.

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 CRA assessment-area versus lending footprint after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• The population in CRA assessment-area versus lending footprint is the one a SPCP that originated almost no loans to the intended class named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in CRA assessment-area versus lending footprint is adjacent only to a SPCP that originated almost no loans to the intended class; Temporary compensating control is the honest Fair Lending call.
• A small-business desk using a new vendor score already contained a SPCP that originated almost no loans to the intended class before CRA assessment-area versus lending footprint arrived; no new Pricing and Credit Limits path.
• Provenance on CRA assessment-area versus lending footprint after a SPCP that originated almost no loans to the intended class is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Match the adverse-action language to the facts in CRA assessment-area versus lending footprint.
• Check HMDA coding and underwriting policy against the exam response should.
• Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class.
• For this Fair Lending Pricing and Credit Limits file, read CRA assessment-area versus lending footprint against a SPCP that originated almost no loans to the intended class and write the one fact that would move the exam response should for model-risk partner for credit scoring.

Recommendation