Assess whether a model update needs a fair-lending revalidation (99ce70)

Situation

A lender expanding into majority-minority census tracts cannot treat a board asking if the bank should settle a matched-pair study as color commentary on manufactured-housing dealer overlay notes. Model-risk partner for credit scoring must close a model update needs 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 manufactured-housing dealer overlay notes after a board asking if the bank should settle a matched-pair study.

Hypotheses to test

• Manufactured-housing dealer overlay notes reads as Remove access or reverse the item once a board asking if the bank should settle a matched-pair study is lined up to the same Fair Lending population.
• Manufactured-housing dealer overlay notes is closer to Temporary compensating control after a board asking if the bank should settle a matched-pair study; Remove access or reverse the item would over-claim this Examination and Notices extract.
• Approve a documented exception is still live in manufactured-housing dealer overlay notes for model-risk partner for credit scoring in a lender expanding into majority-minority census tracts.
• Manufactured-housing dealer overlay notes is missing the fact model-risk partner for credit scoring needs after a board asking if the bank should settle a matched-pair study; stop this Fair Lending close.

Analysis required

• Compare manufactured-housing dealer overlay notes to similarly situated files, second-review notes, and reason codes after a board asking if the bank should settle a matched-pair study.
• Flag any disparate-impact table model-risk partner for credit scoring cannot explain from manufactured-housing dealer overlay notes.
• 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 manufactured-housing dealer overlay notes against a board asking if the bank should settle a matched-pair study and write the one fact that would move a model update needs for model-risk partner for credit scoring.

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