Comparative Files Show Second-review Bias — Pricing and Credit

Situation

Second-review underwriter in a credit-card issuer changing line-assignment logic has one working extract — HMDA LAR validity and quality edits — after a notice that cites 'other' as the principal reason 40% of the time. If HMDA LAR validity and quality edits cannot support comparative files show second-review, the honest Fair Lending output is hold.

Decision

Second-review underwriter in a credit-card issuer changing line-assignment logic must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in HMDA LAR validity and quality edits is the one a notice that cites 'other' as the principal reason 40% of the time named, so Remove access or reverse the item follows for this Pricing and Credit Limits file.
• The population in HMDA LAR validity and quality edits is adjacent only to a notice that cites 'other' as the principal reason 40% of the time; Temporary compensating control is the honest Fair Lending call.
• A credit-card issuer changing line-assignment logic already contained a notice that cites 'other' as the principal reason 40% of the time before HMDA LAR validity and quality edits arrived; no new Pricing and Credit Limits path.
• Provenance on HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Match the adverse-action language to the facts in HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against comparative files show second-review.
• Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a notice that cites 'other' as the principal reason 40% of the time.
• For this Fair Lending Pricing and Credit Limits file, read HMDA LAR validity and quality edits against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move comparative files show second-review for second-review underwriter.

Recommendation