Assess whether comparative files show second-review bias (233714)

Situation

A lender expanding into majority-minority census tracts cannot treat a HMDA resubmission that still fails quality edits as color commentary on credit-card limit assignment disparity table. Model-risk partner for credit scoring must close comparative files show second-review from that extract under Fair Lending / Examination and Notices.

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 credit-card limit assignment disparity table after a HMDA resubmission that still fails quality edits.

Hypotheses to test

• A HMDA resubmission that still fails quality edits is noise around an already-controlled Examination and Notices process in a lender expanding into majority-minority census tracts, given credit-card limit assignment disparity table.
• A HMDA resubmission that still fails quality edits is the event in credit-card limit assignment disparity table that forces Remove access or reverse the item for model-risk partner for credit scoring under Fair Lending.
• Credit-card limit assignment disparity table shows a one-file miss after a HMDA resubmission that still fails quality edits, not a Examination and Notices program failure.
• Credit-card limit assignment disparity table cannot decide comparative files show second-review yet after a HMDA resubmission that still fails quality edits; hold is the only Fair Lending close a lender expanding into majority-minority census tracts can defend.

Analysis required

• Match the adverse-action language to the facts in credit-card limit assignment disparity table.
• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare credit-card limit assignment disparity table to similarly situated files, second-review notes, and reason codes after a HMDA resubmission that still fails quality edits.
• For this Fair Lending Examination and Notices file, read credit-card limit assignment disparity table against a HMDA resubmission that still fails quality edits and write the one fact that would move comparative files show second-review for model-risk partner for credit scoring.

Recommendation