Assess whether a model update needs a fair-lending revalidation (4cc41c)

Situation

Model-risk partner for credit scoring owns a model update needs inside a credit union rolling out a special-purpose credit program with small-business decline comparative file set as the only packet. A CRA PE that called the assessment area too narrow is what changed the clock for this Fair Lending Redlining and HMDA Data file.

Decision

Model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program 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 CRA PE that called the assessment area too narrow.

Hypotheses to test

• Small-business decline comparative file set reads as Remove access or reverse the item once a CRA PE that called the assessment area too narrow is lined up to the same Fair Lending population.
• Small-business decline comparative file set is closer to Temporary compensating control after a CRA PE that called the assessment area too narrow; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract.
• Approve a documented exception is still live in small-business decline comparative file set for model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program.
• Small-business decline comparative file set is missing the fact model-risk partner for credit scoring needs after a CRA PE that called the assessment area too narrow; stop this Fair Lending close.

Analysis required

• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a CRA PE that called the assessment area too narrow.
• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from small-business decline comparative file set.
• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• For this Fair Lending Redlining and HMDA Data file, read small-business decline comparative file set against a CRA PE that called the assessment area too narrow and write the one fact that would move a model update needs for model-risk partner for credit scoring.

Recommendation