Assess whether a model update needs a fair-lending revalidation (08e855)

Situation

The desk packet is model-reason-code mapping that does not match notices after a board asking if the bank should settle a matched-pair study. Community-development lender in an institution preparing for a redlining exam has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending CRA and Special-Purpose Programs file.

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 model-reason-code mapping that does not match notices after a board asking if the bank should settle a matched-pair study.

Hypotheses to test

• A board asking if the bank should settle a matched-pair study is noise around an already-controlled CRA and Special-Purpose Programs process in an institution preparing for a redlining exam, given model-reason-code mapping that does not match notices.
• A board asking if the bank should settle a matched-pair study is the event in model-reason-code mapping that does not match notices that forces Remove access or reverse the item for community-development lender under Fair Lending.
• Model-reason-code mapping that does not match notices shows a one-file miss after a board asking if the bank should settle a matched-pair study, not a CRA and Special-Purpose Programs program failure.
• Model-reason-code mapping that does not match notices cannot decide a model update needs yet after a board asking if the bank should settle a matched-pair study; hold is the only Fair Lending close an institution preparing for a redlining exam can defend.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare model-reason-code mapping that does not match notices to similarly situated files, second-review notes, and reason codes after a board asking if the bank should settle a matched-pair study.
• Flag any disparate-impact table community-development lender cannot explain from model-reason-code mapping that does not match notices.
• For this Fair Lending CRA and Special-Purpose Programs file, read model-reason-code mapping that does not match notices against a board asking if the bank should settle a matched-pair study and write the one fact that would move a model update needs for community-development lender.