Assess whether comparative files show second-review bias (96576f)

Situation

Adverse-action notice principal-reason sample arrived with a DOJ or CFPB monitor request for pricing files for model-risk partner for credit scoring. That is a Fair Lending Examination and Notices decision on comparative files show second-review in a lender expanding into majority-minority census tracts.

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 adverse-action notice principal-reason sample after a DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• Adverse-action notice principal-reason sample 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.
• Adverse-action notice principal-reason sample 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 Examination and Notices extract.
• Approve a documented exception is still live in adverse-action notice principal-reason sample for model-risk partner for credit scoring in a lender expanding into majority-minority census tracts.
• Adverse-action notice principal-reason sample 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 adverse-action notice principal-reason sample 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 adverse-action notice principal-reason sample.
• Test a documented exception versus a pattern a lender expanding into majority-minority census tracts must defend.
• For this Fair Lending Examination and Notices file, read adverse-action notice principal-reason sample against a DOJ or CFPB monitor request for pricing files and write the one fact that would move comparative files show second-review for model-risk partner for credit scoring.

Recommendation