Assess whether a model update needs a fair-lending revalidation (6b61a2)

Situation

A credit union rolling out a special-purpose credit program cannot treat a marketing mailer that skipped majority-minority tracts as color commentary on small-business decline comparative file set. Second-review underwriter must close a model update needs from that extract under Fair Lending / Examination and Notices.

Decision

Second-review underwriter 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 small-business decline comparative file set after a marketing mailer that skipped majority-minority tracts.

Hypotheses to test

• Authorize Remove access or reverse the item now; small-business decline comparative file set already has the discriminator after a marketing mailer that skipped majority-minority tracts.
• Keep Temporary compensating control in force until small-business decline comparative file set is completed after a marketing mailer that skipped majority-minority tracts for second-review underwriter.
• Treat small-business decline comparative file set as Approve a documented exception because both readings appear after a marketing mailer that skipped majority-minority tracts.
• Refuse a Fair Lending close: second-review underwriter does not have the page a model update needs turns on in small-business decline comparative file set.

Analysis required

• Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend.
• Match the adverse-action language to the facts in small-business decline comparative file set.
• Check HMDA coding and underwriting policy against a model update needs.
• For this Fair Lending Examination and Notices file, read small-business decline comparative file set against a marketing mailer that skipped majority-minority tracts and write the one fact that would move a model update needs for second-review underwriter.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Examination and Notices packet (small-business decline comparative file set after a marketing mailer that skipped majority-minority tracts). The follow-on Examination and Notices action is what second-review underwriter does next: implement the option, assign an owner, and log the missing fact.