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

Situation

HMDA data-quality manager owns a model update needs inside a lender expanding into majority-minority census tracts with model-reason-code mapping that does not match notices as the only packet. A HMDA resubmission that still fails quality edits is what changed the clock 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 model-reason-code mapping that does not match notices after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• A HMDA resubmission that still fails quality edits is noise around an already-controlled Pricing and Credit Limits process in a lender expanding into majority-minority census tracts, given model-reason-code mapping that does not match notices.
• A HMDA resubmission that still fails quality edits is the event in model-reason-code mapping that does not match notices that forces Remove access or reverse the item for HMDA data-quality manager under Fair Lending.
• Model-reason-code mapping that does not match notices shows a one-file miss after a HMDA resubmission that still fails quality edits, not a Pricing and Credit Limits program failure.
• Model-reason-code mapping that does not match notices cannot decide a model update needs yet after a HMDA resubmission that still fails quality edits; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Compare model-reason-code mapping that does not match notices to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from model-reason-code mapping that does not match notices.
• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• For this Fair Lending Pricing and Credit Limits file, read model-reason-code mapping that does not match notices against a HMDA resubmission that still fails quality edits and write the one fact that would move a model update needs for HMDA data-quality manager.

Recommendation