Assess whether a model update needs a fair-lending revalidation (3edb3b)

Situation

A CRA PE that called the assessment area too narrow put CRA assessment-area versus lending footprint in front of CRA strategist in a mortgage company after a pricing-regression spike. This Fair Lending / CRA and Special-Purpose Programs close is a model update needs from CRA assessment-area versus lending footprint, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

CRA strategist in a mortgage company after a pricing-regression spike must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using CRA assessment-area versus lending footprint 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 CRA and Special-Purpose Programs process in a mortgage company after a pricing-regression spike, given CRA assessment-area versus lending footprint.
• A CRA PE that called the assessment area too narrow is the event in CRA assessment-area versus lending footprint that forces Remove access or reverse the item for CRA strategist under Fair Lending.
• CRA assessment-area versus lending footprint shows a one-file miss after a CRA PE that called the assessment area too narrow, not a CRA and Special-Purpose Programs program failure.
• CRA assessment-area versus lending footprint 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 mortgage company after a pricing-regression spike can defend.

Analysis required

• Compare CRA assessment-area versus lending footprint 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 CRA strategist cannot explain from CRA assessment-area versus lending footprint.
• Test a documented exception versus a pattern a mortgage company after a pricing-regression spike must defend.
• For this Fair Lending CRA and Special-Purpose Programs file, read CRA assessment-area versus lending footprint against a CRA PE that called the assessment area too narrow and write the one fact that would move a model update needs for CRA strategist.