Assess whether a model update needs a fair-lending revalidation (b860c3)

Situation

CRA assessment-area versus lending footprint arrived with an underwriter chat that used coded language for CRA strategist. That is a Fair Lending Redlining and HMDA Data decision on a model update needs in an institution preparing for a redlining exam.

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 CRA assessment-area versus lending footprint after an underwriter chat that used coded language.

Hypotheses to test

• CRA strategist can defend Remove access or reverse the item from CRA assessment-area versus lending footprint after an underwriter chat that used coded language in a Fair Lending challenge.
• CRA strategist cannot defend Remove access or reverse the item from CRA assessment-area versus lending footprint; Temporary compensating control is what the extract actually supports after an underwriter chat that used coded language.
• An underwriter chat that used coded language never reached the population in CRA assessment-area versus lending footprint — reopen intake, do not close a model update needs.
• Two facts in CRA assessment-area versus lending footprint after an underwriter chat that used coded language conflict for CRA strategist; hold this Redlining and HMDA Data file.

Analysis required

• Flag any disparate-impact table CRA strategist cannot explain from CRA assessment-area versus lending footprint.
• 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 CRA assessment-area versus lending footprint.
• For this Fair Lending Redlining and HMDA Data file, read CRA assessment-area versus lending footprint against an underwriter chat that used coded language 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 (CRA assessment-area versus lending footprint after an underwriter chat that used coded language). The follow-on Redlining and HMDA Data action is what CRA strategist does next: implement the option, assign an owner, and log the missing fact.