Assess whether a model update needs a fair-lending revalidation (e3bb72)

Situation

CRA strategist in a bank with thin HMDA LAR quality has one working extract — underwriting exception log by branch — after a SPCP that originated almost no loans to the intended class. If underwriting exception log by branch cannot support a model update needs, the honest Fair Lending output is hold.

Decision

CRA strategist in a bank with thin HMDA LAR quality must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using underwriting exception log by branch after a SPCP that originated almost no loans to the intended class.

Hypotheses to test

• The population in underwriting exception log by branch is the one a SPCP that originated almost no loans to the intended class named, so Remove access or reverse the item follows for this Examination and Notices file.
• The population in underwriting exception log by branch is adjacent only to a SPCP that originated almost no loans to the intended class; Temporary compensating control is the honest Fair Lending call.
• A bank with thin HMDA LAR quality already contained a SPCP that originated almost no loans to the intended class before underwriting exception log by branch arrived; no new Examination and Notices path.
• Provenance on underwriting exception log by branch after a SPCP that originated almost no loans to the intended class is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Flag any disparate-impact table CRA strategist cannot explain from underwriting exception log by branch.
• Test a documented exception versus a pattern a bank with thin HMDA LAR quality must defend.
• Match the adverse-action language to the facts in underwriting exception log by branch.
• For this Fair Lending Examination and Notices file, read underwriting exception log by branch against a SPCP that originated almost no loans to the intended class and write the one fact that would move a model update needs for CRA strategist.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (underwriting exception log by branch after a SPCP that originated almost no loans to the intended class). Lead with the Fair Lending option underwriting exception log by branch can support after a SPCP that originated almost no loans to the intended class, then the two facts that force it, then the Monday action for CRA strategist in a bank with thin HMDA LAR quality.