Assess whether a model update needs a fair-lending revalidation (c051a8)

Situation

Mortgage pricing residual by prohibited-basis group arrived with a vendor score change with no disparate-impact test for HMDA data-quality manager. That is a Fair Lending Pricing and Credit Limits decision on a model update needs in a lender expanding into majority-minority census tracts.

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 mortgage pricing residual by prohibited-basis group after a vendor score change with no disparate-impact test.

Hypotheses to test

• Mortgage pricing residual by prohibited-basis group reads as Remove access or reverse the item once a vendor score change with no disparate-impact test is lined up to the same Fair Lending population.
• Mortgage pricing residual by prohibited-basis group is closer to Temporary compensating control after a vendor score change with no disparate-impact test; Remove access or reverse the item would over-claim this Pricing and Credit Limits extract.
• Approve a documented exception is still live in mortgage pricing residual by prohibited-basis group for HMDA data-quality manager in a lender expanding into majority-minority census tracts.
• Mortgage pricing residual by prohibited-basis group is missing the fact HMDA data-quality manager needs after a vendor score change with no disparate-impact test; stop this Fair Lending close.

Analysis required

• Flag any disparate-impact table HMDA data-quality manager cannot explain from mortgage pricing residual by prohibited-basis group.
• 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 mortgage pricing residual by prohibited-basis group.
• For this Fair Lending Pricing and Credit Limits file, read mortgage pricing residual by prohibited-basis group against a vendor score change with no disparate-impact test 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 (mortgage pricing residual by prohibited-basis group after a vendor score change with no disparate-impact test). Lead with the Fair Lending option mortgage pricing residual by prohibited-basis group can support after a vendor score change with no disparate-impact test, 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.