Assess whether a model update needs a fair-lending revalidation (e397d2)

Situation

Small-business decline comparative file set arrived with a DOJ or CFPB monitor request for pricing files for HMDA data-quality manager. That is a Fair Lending Redlining and HMDA Data decision on a model update needs in a credit-card issuer changing line-assignment logic.

Decision

HMDA data-quality manager 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 small-business decline comparative file set after a DOJ or CFPB monitor request for pricing files.

Hypotheses to test

• A DOJ or CFPB monitor request for pricing files is noise around an already-controlled Redlining and HMDA Data process in a credit-card issuer changing line-assignment logic, given small-business decline comparative file set.
• A DOJ or CFPB monitor request for pricing files is the event in small-business decline comparative file set that forces Remove access or reverse the item for HMDA data-quality manager under Fair Lending.
• Small-business decline comparative file set shows a one-file miss after a DOJ or CFPB monitor request for pricing files, not a Redlining and HMDA Data program failure.
• Small-business decline comparative file set cannot decide a model update needs yet after a DOJ or CFPB monitor request for pricing files; hold is the only Fair Lending close a credit-card issuer changing line-assignment logic can defend.

Analysis required

• Check HMDA coding and underwriting policy against a model update needs.
• Compare small-business decline comparative file set to similarly situated files, second-review notes, and reason codes after a DOJ or CFPB monitor request for pricing files.
• Flag any disparate-impact table HMDA data-quality manager cannot explain from small-business decline comparative file set.
• For this Fair Lending Redlining and HMDA Data file, read small-business decline comparative file set against a DOJ or CFPB monitor request for pricing files and write the one fact that would move a model update needs for HMDA data-quality manager.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / Redlining and HMDA Data packet (small-business decline comparative file set after a DOJ or CFPB monitor request for pricing files). The follow-on Redlining and HMDA Data action is what HMDA data-quality manager does next: implement the option, assign an owner, and log the missing fact.