Assess whether a model update needs a fair-lending revalidation (6af7b8)

Situation

A board asking if the bank should settle a matched-pair study put mortgage pricing residual by prohibited-basis group in front of fair-lending officer in an institution preparing for a redlining exam. This Fair Lending / Examination and Notices close is a model update needs from mortgage pricing residual by prohibited-basis group, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Fair-lending officer 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 mortgage pricing residual by prohibited-basis group after a board asking if the bank should settle a matched-pair study.

Hypotheses to test

• Mortgage pricing residual by prohibited-basis group reads as Remove access or reverse the item once a board asking if the bank should settle a matched-pair study is lined up to the same Fair Lending population.
• Mortgage pricing residual by prohibited-basis group is closer to Temporary compensating control after a board asking if the bank should settle a matched-pair study; Remove access or reverse the item would over-claim this Examination and Notices extract.
• Approve a documented exception is still live in mortgage pricing residual by prohibited-basis group for fair-lending officer in an institution preparing for a redlining exam.
• Mortgage pricing residual by prohibited-basis group is missing the fact fair-lending officer needs after a board asking if the bank should settle a matched-pair study; stop this Fair Lending close.

Analysis required

• Match the adverse-action language to the facts in mortgage pricing residual by prohibited-basis group.
• Check HMDA coding and underwriting policy against a model update needs.
• Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after a board asking if the bank should settle a matched-pair study.
• For this Fair Lending Examination and Notices file, read mortgage pricing residual by prohibited-basis group 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 fair-lending officer.

Recommendation