Assess whether pricing disparities are justified by legitimate factors

SITUATION In a credit union rolling out a special-purpose credit program, small-business decline comparative file set is the evidence after a notice that cites 'other' as the principal reason 40% of the time. Model-risk partner for credit scoring has to pick Remove access or reverse the item or Temporary compensating control for this Fair Lending Redlining and HMDA Data close using small-business decline comparative file set.

DECISION Model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using small-business decline comparative file set after a notice that cites 'other' as the principal reason 40% of the time.

HYPOTHESES TO TEST 1. Small-business decline comparative file set reads as Remove access or reverse the item once a notice that cites 'other' as the principal reason 40% of the time is lined up to the same Fair Lending population. 2. Small-business decline comparative file set is closer to Temporary compensating control after a notice that cites 'other' as the principal reason 40% of the time; Remove access or reverse the item would over-claim this Redlining and HMDA Data extract. 3. Approve a documented exception is still live in small-business decline comparative file set for model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program. 4. Small-business decline comparative file set is missing the fact model-risk partner for credit scoring needs after a notice that cites 'other' as the principal reason 40% of the time; stop this Fair Lending close.

ANALYSIS REQUIRED 1. Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend. 2. Match the adverse-action language to the facts in small-business decline comparative file set. 3. Check HMDA coding and underwriting policy against pricing disparities are justified. 4. For this Fair Lending Redlining and HMDA Data file, read small-business decline comparative file set against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move pricing disparities are justified for model-risk partner for credit scoring.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (small-business decline comparative file set after a notice that cites 'other' as the principal reason 40% of the time). Lead with the Fair Lending option small-business decline comparative file set can support after a notice that cites 'other' as the principal reason 40% of the time, then the two facts that force it, then the Monday action for model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program.