Assess whether a model update needs a fair-lending revalidation (df310f)

Situation

Redlining and HMDA Data work in an institution preparing for a redlining exam now turns on a model update needs because a CRA PE that called the assessment area too narrow put appraisal-gap outcomes in majority-minority tracts in play. CRA strategist should say what appraisal-gap outcomes in majority-minority tracts proves.

Decision

CRA strategist 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 appraisal-gap outcomes in majority-minority tracts after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• CRA strategist can defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts after a CRA PE that called the assessment area too narrow in a Fair Lending challenge.
• CRA strategist cannot defend Remove access or reverse the item from appraisal-gap outcomes in majority-minority tracts; Temporary compensating control is what the extract actually supports after a CRA PE that called the assessment area too narrow.
• A CRA PE that called the assessment area too narrow never reached the population in appraisal-gap outcomes in majority-minority tracts — reopen intake, do not close a model update needs.
• Two facts in appraisal-gap outcomes in majority-minority tracts after a CRA PE that called the assessment area too narrow conflict for CRA strategist; hold this Redlining and HMDA Data file.

Analysis required

• Test a documented exception versus a pattern an institution preparing for a redlining exam must defend.
• Match the adverse-action language to the facts in appraisal-gap outcomes in majority-minority tracts.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending Redlining and HMDA Data file, read appraisal-gap outcomes in majority-minority tracts 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.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (appraisal-gap outcomes in majority-minority tracts after a CRA PE that called the assessment area too narrow). Lead with the Fair Lending option appraisal-gap outcomes in majority-minority tracts can support after a CRA PE that called the assessment area too narrow, then the two facts that force it, then the Monday action for CRA strategist in an institution preparing for a redlining exam.