Assess whether a model update needs a fair-lending revalidation from CRA

Situation

Pricing and Credit Limits work in a manufactured-housing lender with dealer-originated files now turns on a model update needs because a community complaint about appraisal gaps put CRA assessment-area versus lending footprint in play. CRA strategist should say what CRA assessment-area versus lending footprint proves.

Decision

CRA strategist in a manufactured-housing lender with dealer-originated files 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 community complaint about appraisal gaps.

Hypotheses to test

• CRA assessment-area versus lending footprint reads as Remove access or reverse the item once a community complaint about appraisal gaps is lined up to the same Fair Lending population.
• CRA assessment-area versus lending footprint is closer to Temporary compensating control after a community complaint about appraisal gaps; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in CRA assessment-area versus lending footprint for CRA strategist in a manufactured-housing lender with dealer-originated files.
• CRA assessment-area versus lending footprint is missing the fact CRA strategist needs after a community complaint about appraisal gaps; stop this Fair Lending close.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare CRA assessment-area versus lending footprint to similarly situated files, second-review notes, and reason codes after a community complaint about appraisal gaps.
• Flag any disparate-impact table CRA strategist cannot explain from CRA assessment-area versus lending footprint.
• For this Fair Lending Pricing and Credit Limits file, read CRA assessment-area versus lending footprint against a community complaint about appraisal gaps and write the one fact that would move a model update needs for CRA strategist.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (CRA assessment-area versus lending footprint after a community complaint about appraisal gaps). Lead with the Fair Lending option CRA assessment-area versus lending footprint can support after a community complaint about appraisal gaps, then the two facts that force it, then the Monday action for CRA strategist in a manufactured-housing lender with dealer-originated files.