Assess whether a model update needs a fair-lending revalidation (0556cf)

Situation

A small-business desk using a new vendor score cannot treat a DOJ or CFPB monitor request for pricing files as color commentary on mortgage pricing residual by prohibited-basis group. Model-risk partner for credit scoring must close a model update needs from that extract under Fair Lending / Pricing and Credit Limits.

Decision

Model-risk partner for credit scoring in a small-business desk using a new vendor score 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 DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• Mortgage pricing residual by prohibited-basis group reads as Remove access or reverse the item once a DOJ or CFPB monitor request for pricing files is lined up to the same Fair Lending population.
• Mortgage pricing residual by prohibited-basis group is closer to Temporary compensating control after a DOJ or CFPB monitor request for pricing files; 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 model-risk partner for credit scoring in a small-business desk using a new vendor score.
• Mortgage pricing residual by prohibited-basis group is missing the fact model-risk partner for credit scoring needs after a DOJ or CFPB monitor request for pricing files; stop this Fair Lending close.

Analysis required

• Compare mortgage pricing residual by prohibited-basis group to similarly situated files, second-review notes, and reason codes after a DOJ or CFPB monitor request for pricing files.
• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from mortgage pricing residual by prohibited-basis group.
• Test a documented exception versus a pattern a small-business desk using a new vendor score must defend.
• For this Fair Lending Pricing and Credit Limits file, read mortgage pricing residual by prohibited-basis group 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