Assess whether a model update needs a fair-lending revalidation (3cba7a)

Situation

A credit-card issuer changing line-assignment logic cannot treat a SPCP that originated almost no loans to the intended class as color commentary on model-reason-code mapping that does not match notices. Model-risk partner for credit scoring must close a model update needs from that extract under Fair Lending / CRA and Special-Purpose Programs.

Decision

Model-risk partner for credit scoring in a credit-card issuer changing line-assignment logic 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 SPCP that originated almost no loans to the intended class.

Hypotheses to test

• Authorize Remove access or reverse the item now; model-reason-code mapping that does not match notices already has the discriminator after a SPCP that originated almost no loans to the intended class.
• Keep Temporary compensating control in force until model-reason-code mapping that does not match notices is completed after a SPCP that originated almost no loans to the intended class for model-risk partner for credit scoring.
• Treat model-reason-code mapping that does not match notices 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: model-risk partner for credit scoring does not have the page a model update needs turns on in model-reason-code mapping that does not match notices.

Analysis required

• Match the adverse-action language to the facts in model-reason-code mapping that does not match notices.
• Check HMDA coding and underwriting policy against a model update needs.
• Compare model-reason-code mapping that does not match notices to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class.
• For this Fair Lending CRA and Special-Purpose Programs file, read model-reason-code mapping that does not match notices 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 model-risk partner for credit scoring.

Recommendation