Whether a model update needs a fair-lending revalidation from credit-card

Situation

Redlining and HMDA Data work in a lender expanding into majority-minority census tracts now turns on a model update needs because a board asking if the bank should settle a matched-pair study put credit-card limit assignment disparity table in play. Adverse-action notice operations lead should say what credit-card limit assignment disparity table proves.

Decision

Adverse-action notice operations lead in a lender expanding into majority-minority census tracts must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using credit-card limit assignment disparity table after a board asking if the bank should settle a matched-pair study.

Hypotheses to test

• Authorize Remove access or reverse the item now; credit-card limit assignment disparity table already has the discriminator after a board asking if the bank should settle a matched-pair study.
• Keep Temporary compensating control in force until credit-card limit assignment disparity table is completed after a board asking if the bank should settle a matched-pair study for adverse-action notice operations lead.
• Treat credit-card limit assignment disparity table as Approve a documented exception because both readings appear after a board asking if the bank should settle a matched-pair study.
• Refuse a Fair Lending close: adverse-action notice operations lead does not have the page a model update needs turns on in credit-card limit assignment disparity table.

Analysis required

• Flag any disparate-impact table adverse-action notice operations lead cannot explain from credit-card limit assignment disparity table.
• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in credit-card limit assignment disparity table.
• For this Fair Lending Redlining and HMDA Data file, read credit-card limit assignment disparity table against a board asking if the bank should settle a matched-pair study and write the one fact that would move a model update needs for adverse-action notice operations lead.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (credit-card limit assignment disparity table after a board asking if the bank should settle a matched-pair study). The follow-on Redlining and HMDA Data action is what adverse-action notice operations lead does next: implement the option, assign an owner, and log the missing fact.