Assess whether HMDA data can be relied on for the exam after a notice that

Situation

In a small-business desk using a new vendor score, SPCP written plan versus actual originations is the evidence after a notice that cites 'other' as the principal reason 40% of the time. Model-risk partner for credit scoring has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Pricing and Credit Limits close using SPCP written plan versus actual originations.

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 SPCP written plan versus actual originations after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in SPCP written plan versus actual originations 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 SPCP written plan versus actual originations 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 SPCP written plan versus actual originations arrived; no new Pricing and Credit Limits path.
• Provenance on SPCP written plan versus actual originations 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 HMDA data can be relied on.
• Compare SPCP written plan versus actual originations 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 SPCP written plan versus actual originations.
• For this Fair Lending Pricing and Credit Limits file, read SPCP written plan versus actual originations against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move HMDA data can be relied on for model-risk partner for credit scoring.