Assess whether a redlining pattern exists after controls (9658a5)

Situation

After an exception rate twice as high for one group after credit controls, mortgage pricing residual by prohibited-basis group is what model-risk partner for credit scoring can touch in a lender expanding into majority-minority census tracts. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Examination and Notices file.

Decision

Model-risk partner for credit scoring in a lender expanding into majority-minority census tracts 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 an exception rate twice as high for one group after credit controls.

Hypotheses to test

• An exception rate twice as high for one group after credit controls is noise around an already-controlled Examination and Notices process in a lender expanding into majority-minority census tracts, given mortgage pricing residual by prohibited-basis group.
• An exception rate twice as high for one group after credit controls is the event in mortgage pricing residual by prohibited-basis group that forces Remove access or reverse the item for model-risk partner for credit scoring under Fair Lending.
• Mortgage pricing residual by prohibited-basis group shows a one-file miss after an exception rate twice as high for one group after credit controls, not a Examination and Notices program failure.
• Mortgage pricing residual by prohibited-basis group cannot decide a redlining pattern exists yet after an exception rate twice as high for one group after credit controls; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• 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 lender expanding into majority-minority census tracts must defend.
• Match the adverse-action language to the facts in mortgage pricing residual by prohibited-basis group.
• For this Fair Lending Examination and Notices file, read mortgage pricing residual by prohibited-basis group against an exception rate twice as high for one group after credit controls and write the one fact that would move a redlining pattern exists for model-risk partner for credit scoring.