Assess whether a model update needs a fair-lending revalidation (bab955)

Situation

CRA and Special-Purpose Programs work in an institution preparing for a redlining exam now turns on a model update needs because a community complaint about appraisal gaps put small-business decline comparative file set in play. CRA and Special-Purpose Programs work in an institution preparing for a redlining exam now turns on a model update needs because a community complaint about appraisal gaps put small-business decline comparative file set in play; community-development lender should say what small-business decline comparative file set proves for Fair Lending.

Decision

Community-development lender in an institution preparing for a redlining exam 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 community complaint about appraisal gaps.

Hypotheses to test

• Community-development lender can defend Remove access or reverse the item from small-business decline comparative file set after a community complaint about appraisal gaps in a Fair Lending challenge.
• Community-development lender cannot defend Remove access or reverse the item from small-business decline comparative file set; Temporary compensating control is what the extract actually supports after a community complaint about appraisal gaps.
• A community complaint about appraisal gaps never reached the population in small-business decline comparative file set — reopen intake, do not close a model update needs.
• Two facts in small-business decline comparative file set after a community complaint about appraisal gaps conflict for community-development lender; hold this CRA and Special-Purpose Programs file.

Analysis required

• Match the adverse-action language to the facts in small-business decline comparative file set.
• Check HMDA coding and underwriting policy against a model update needs.
• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a community complaint about appraisal gaps.
• For this Fair Lending CRA and Special-Purpose Programs file, read small-business decline comparative file set against a community complaint about appraisal gaps and write the one fact that would move a model update needs for community-development lender.