Assess whether a model update needs a fair-lending revalidation after a SPCP

Situation

The desk packet is appraisal-gap outcomes in majority-minority tracts after a SPCP that originated almost no loans to the intended class. HMDA data-quality manager in a lender expanding into majority-minority census tracts has to name Remove access or reverse the item or Temporary compensating control for this Fair Lending Pricing and Credit Limits file.

Decision

HMDA data-quality manager in a lender expanding into majority-minority census tracts 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 SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Authorize Remove access or reverse the item now; appraisal-gap outcomes in majority-minority tracts already has the discriminator after a SPCP that originated almost no loans to the intended class.
• Keep Temporary compensating control in force until appraisal-gap outcomes in majority-minority tracts is completed after a SPCP that originated almost no loans to the intended class for HMDA data-quality manager.
• Treat appraisal-gap outcomes in majority-minority tracts as Approve a documented exception because both readings appear after a SPCP that originated almost no loans to the intended class.
• Refuse a Fair Lending close: HMDA data-quality manager does not have the page a model update needs turns on in appraisal-gap outcomes in majority-minority tracts.

Analysis required

• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts 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 Pricing and Credit Limits file, read appraisal-gap outcomes in majority-minority tracts against a SPCP that originated almost no loans to the intended class and write the one fact that would move a model update needs for HMDA data-quality manager.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Pricing and Credit Limits packet (appraisal-gap outcomes in majority-minority tracts after a SPCP that originated almost no loans to the intended class). Lead with the Fair Lending option appraisal-gap outcomes in majority-minority tracts can support after a SPCP that originated almost no loans to the intended class, then the two facts that force it, then the Monday action for HMDA data-quality manager in a lender expanding into majority-minority census tracts.