Assess whether a model update needs a fair-lending revalidation (f6ac7e)

Situation

After a CRA PE that called the assessment area too narrow, manufactured-housing dealer overlay notes is what HMDA data-quality manager can touch in a credit union rolling out a special-purpose credit program. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this CRA and Special-Purpose Programs file.

Decision

HMDA data-quality manager 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 manufactured-housing dealer overlay notes after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• The population in manufactured-housing dealer overlay notes is the one a CRA PE that called the assessment area too narrow named, so Remove access or reverse the item follows for this CRA and Special-Purpose Programs file.
• The population in manufactured-housing dealer overlay notes is adjacent only to a CRA PE that called the assessment area too narrow; Temporary compensating control is the honest Fair Lending call.
• A credit union rolling out a special-purpose credit program already contained a CRA PE that called the assessment area too narrow before manufactured-housing dealer overlay notes arrived; no new CRA and Special-Purpose Programs path.
• Provenance on manufactured-housing dealer overlay notes after a CRA PE that called the assessment area too narrow is broken; do not pick Remove access or reverse the item or Temporary compensating control yet.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare manufactured-housing dealer overlay notes to similarly situated files, second-review notes, and reason codes after a CRA PE that called the assessment area too narrow.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from manufactured-housing dealer overlay notes.
• For this Fair Lending CRA and Special-Purpose Programs file, read manufactured-housing dealer overlay notes against a CRA PE that called the assessment area too narrow and write the one fact that would move a model update needs for HMDA data-quality manager.

Recommendation