Assess whether a model update needs a fair-lending revalidation (9cf41c)

Situation

A model update needs sits with exam-response coordinator because a HMDA resubmission that still fails quality edits hit a manufactured-housing lender with dealer-originated files. Evidence is small-business decline comparative file set; write the Fair Lending CRA and Special-Purpose Programs option that extract can carry.

Decision

Exam-response coordinator 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 small-business decline comparative file set after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• A HMDA resubmission that still fails quality edits is noise around an already-controlled CRA and Special-Purpose Programs process in a manufactured-housing lender with dealer-originated files, given small-business decline comparative file set.
• A HMDA resubmission that still fails quality edits is the event in small-business decline comparative file set that forces Remove access or reverse the item for exam-response coordinator under Fair Lending.
• Small-business decline comparative file set shows a one-file miss after a HMDA resubmission that still fails quality edits, not a CRA and Special-Purpose Programs program failure.
• Small-business decline comparative file set cannot decide a model update needs yet after a HMDA resubmission that still fails quality edits; hold is the only Fair Lending close a manufactured-housing lender with dealer-originated files can defend.

Analysis required

• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• Flag any disparate-impact table exam-response coordinator cannot explain from small-business decline comparative file set.
• Test a documented exception versus a pattern a manufactured-housing lender with dealer-originated files must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read small-business decline comparative file set against a HMDA resubmission that still fails quality edits and write the one fact that would move a model update needs for exam-response coordinator.

Recommendation