Assess whether a model update needs a fair-lending revalidation (8fa743)

Situation

A CRA PE that called the assessment area too narrow put credit-card limit assignment disparity table in front of CRA strategist in an institution preparing for a redlining exam. This Fair Lending / Redlining and HMDA Data close is a model update needs from credit-card limit assignment disparity table, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

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 credit-card limit assignment disparity table 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 credit-card limit assignment disparity table 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 credit-card limit assignment disparity table; 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 credit-card limit assignment disparity table — reopen intake, do not close a model update needs.
• Two facts in credit-card limit assignment disparity table after a CRA PE that called the assessment area too narrow conflict for CRA strategist; hold this Redlining and HMDA Data file.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare credit-card limit assignment disparity table 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 credit-card limit assignment disparity table.
• For this Fair Lending Redlining and HMDA Data file, read credit-card limit assignment disparity table 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 (credit-card limit assignment disparity table after a CRA PE that called the assessment area too narrow). If credit-card limit assignment disparity table cannot force a Fair Lending label under Redlining and HMDA Data, stop. If credit-card limit assignment disparity table after a CRA PE that called the assessment area too narrow cannot support Remove access or reverse the item versus Temporary compensating control on this Fair Lending Redlining and HMDA Data close, CRA strategist must do not infer a control or scheme beyond the transaction and entitlement evidence.