Assess whether a model update needs a fair-lending revalidation (e28c3d)

Situation

CRA and Special-Purpose Programs work in a credit-card issuer changing line-assignment logic now turns on a model update needs because a DOJ or CFPB monitor request for pricing files put appraisal-gap outcomes in majority-minority tracts in play. Model-risk partner for credit scoring should say what appraisal-gap outcomes in majority-minority tracts proves.

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 appraisal-gap outcomes in majority-minority tracts after a DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• The population in appraisal-gap outcomes in majority-minority tracts is the one a DOJ or CFPB monitor request for pricing files named, so Remove access or reverse the item follows for this CRA and Special-Purpose Programs file.
• The population in appraisal-gap outcomes in majority-minority tracts is adjacent only to a DOJ or CFPB monitor request for pricing files; Temporary compensating control is the honest Fair Lending call.
• A credit-card issuer changing line-assignment logic already contained a DOJ or CFPB monitor request for pricing files before appraisal-gap outcomes in majority-minority tracts arrived; no new CRA and Special-Purpose Programs path.
• Provenance on appraisal-gap outcomes in majority-minority tracts after a DOJ or CFPB monitor request for pricing files is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from appraisal-gap outcomes in majority-minority tracts.
• Test a documented exception versus a pattern a credit-card issuer changing line-assignment logic must defend.
• Match the adverse-action language to the facts in appraisal-gap outcomes in majority-minority tracts.
• For this Fair Lending CRA and Special-Purpose Programs file, read appraisal-gap outcomes in majority-minority tracts against a DOJ or CFPB monitor request for pricing files and write the one fact that would move a model update needs for model-risk partner for credit scoring.

Recommendation