Assess whether a model update needs a fair-lending revalidation (e40ac9)

Situation

The desk packet is manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time. Adverse-action notice operations lead in a lender expanding into majority-minority census tracts has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data file.

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 manufactured-housing dealer overlay notes after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in manufactured-housing dealer overlay notes 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 Redlining and HMDA Data file.
• The population in manufactured-housing dealer overlay notes 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 lender expanding into majority-minority census tracts already contained a notice that cites 'other' as the principal reason 40% of the time before manufactured-housing dealer overlay notes arrived; no new Redlining and HMDA Data path.
• Provenance on manufactured-housing dealer overlay notes 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

• Flag any disparate-impact table adverse-action notice operations lead cannot explain from manufactured-housing dealer overlay notes.
• 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 manufactured-housing dealer overlay notes.
• For this Fair Lending Redlining and HMDA Data file, read manufactured-housing dealer overlay notes against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move a model update needs for adverse-action notice operations lead.

Recommendation