Assess whether a model update needs a fair-lending revalidation (601a28)

Situation

Adverse-action notice operations lead in a lender expanding into majority-minority census tracts has one working extract — mortgage pricing residual by prohibited-basis group — after a marketing mailer that skipped majority-minority tracts. Adverse-action notice operations lead in a lender expanding into majority-minority census tracts has mortgage pricing residual by prohibited-basis group after a marketing mailer that skipped majority-minority tracts. If that extract cannot support a model update needs, the honest Fair Lending Redlining and HMDA Data output is hold.

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 mortgage pricing residual by prohibited-basis group after a marketing mailer that skipped majority-minority tracts.

Hypotheses to test

• A marketing mailer that skipped majority-minority tracts is noise around an already-controlled Redlining and HMDA Data process in a lender expanding into majority-minority census tracts, given mortgage pricing residual by prohibited-basis group.
• A marketing mailer that skipped majority-minority tracts is the event in mortgage pricing residual by prohibited-basis group that forces Remove access or reverse the item for adverse-action notice operations lead under Fair Lending.
• Mortgage pricing residual by prohibited-basis group shows a one-file miss after a marketing mailer that skipped majority-minority tracts, not a Redlining and HMDA Data program failure.
• Mortgage pricing residual by prohibited-basis group cannot decide a model update needs yet after a marketing mailer that skipped majority-minority tracts; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• 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 mortgage pricing residual by prohibited-basis group.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending Redlining and HMDA Data file, read mortgage pricing residual by prohibited-basis group against a marketing mailer that skipped majority-minority tracts and write the one fact that would move a model update needs for adverse-action notice operations lead.