Assess whether a model update needs a fair-lending revalidation (3958f3)

Situation

In a small-business desk using a new vendor score, SPCP written plan versus actual originations is the evidence after an exception rate twice as high for one group after credit controls. Model-risk partner for credit scoring has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Pricing and Credit Limits close using SPCP written plan versus actual originations.

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 SPCP written plan versus actual originations after an exception rate twice as high for one group after credit controls.

Hypotheses to test

• The population in SPCP written plan versus actual originations is the one an exception rate twice as high for one group after credit controls named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in SPCP written plan versus actual originations is adjacent only to an exception rate twice as high for one group after credit controls; Temporary compensating control is the honest Fair Lending call.
• A small-business desk using a new vendor score already contained an exception rate twice as high for one group after credit controls before SPCP written plan versus actual originations arrived; no new Pricing and Credit Limits path.
• Provenance on SPCP written plan versus actual originations after an exception rate twice as high for one group after credit controls is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare SPCP written plan versus actual originations to similarly situated files, second-review notes, and reason codes after an exception rate twice as high for one group after credit controls.
• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from SPCP written plan versus actual originations.
• For this Fair Lending Pricing and Credit Limits file, read SPCP written plan versus actual originations against an exception rate twice as high for one group after credit controls and write the one fact that would move a model update needs for model-risk partner for credit scoring.