Assess whether a model update needs a fair-lending revalidation (5c2b47)

Situation

A model update needs sits with second-review underwriter because a HMDA resubmission that still fails quality edits hit a lender expanding into majority-minority census tracts. Evidence is HMDA LAR validity and quality edits; write the Fair Lending CRA and Special-Purpose Programs option that extract can carry.

Decision

Second-review underwriter 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 HMDA LAR validity and quality edits after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• The population in HMDA LAR validity and quality edits is the one a HMDA resubmission that still fails quality edits named, so Remove access or reverse the item follows for this CRA and Special-Purpose Programs file.
• The population in HMDA LAR validity and quality edits is adjacent only to a HMDA resubmission that still fails quality edits; Temporary compensating control is the honest Fair Lending call.
• A lender expanding into majority-minority census tracts already contained a HMDA resubmission that still fails quality edits before HMDA LAR validity and quality edits arrived; no new CRA and Special-Purpose Programs path.
• Provenance on HMDA LAR validity and quality edits after a HMDA resubmission that still fails quality edits is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• 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 HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending CRA and Special-Purpose Programs file, read HMDA LAR validity and quality edits against a HMDA resubmission that still fails quality edits and write the one fact that would move a model update needs for second-review underwriter.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (HMDA LAR validity and quality edits after a HMDA resubmission that still fails quality edits). The follow-on CRA and Special-Purpose Programs action is what second-review underwriter does next: implement the option, assign an owner, and log the missing fact.