Assess whether a model update needs a fair-lending revalidation (11900a)

Situation

In a lender expanding into majority-minority census tracts, mortgage pricing residual by prohibited-basis group is the evidence after a CRA PE that called the assessment area too narrow. Adverse-action notice operations lead has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data close using mortgage pricing residual by prohibited-basis group.

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 CRA PE that called the assessment area too narrow.

Hypotheses to test

• A CRA PE that called the assessment area too narrow 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 CRA PE that called the assessment area too narrow 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 CRA PE that called the assessment area too narrow, not a Redlining and HMDA Data program failure.
• Mortgage pricing residual by prohibited-basis group cannot decide a model update needs yet after a CRA PE that called the assessment area too narrow; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Compare mortgage pricing residual by prohibited-basis group 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 adverse-action notice operations lead cannot explain from mortgage pricing residual by prohibited-basis group.
• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• For this Fair Lending Redlining and HMDA Data file, read mortgage pricing residual by prohibited-basis group against a CRA PE that called the assessment area too narrow and write the one fact that would move a model update needs for adverse-action notice operations lead.