Assess whether pricing disparities are justified by legitimate factors

SITUATION A live Fair Lending CRA and Special-Purpose Programs file in a credit-card issuer changing line-assignment logic now turns on SPCP written plan versus actual originations after a DOJ or CFPB monitor request for pricing files. Model-risk partner for credit scoring should state what that extract proves for whether pricing disparities are justified by legitimate factors.

DECISION Model-risk partner for credit scoring 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 SPCP written plan versus actual originations after a DOJ or CFPB monitor request for pricing files.

HYPOTHESES TO TEST 1. A DOJ or CFPB monitor request for pricing files is noise around an already-controlled CRA and Special-Purpose Programs process in a credit-card issuer changing line-assignment logic, given SPCP written plan versus actual originations. 2. A DOJ or CFPB monitor request for pricing files is the event in SPCP written plan versus actual originations that forces Remove access or reverse the item for model-risk partner for credit scoring under Fair Lending. 3. SPCP written plan versus actual originations shows a one-file miss after a DOJ or CFPB monitor request for pricing files, not a CRA and Special-Purpose Programs program failure. 4. SPCP written plan versus actual originations cannot decide pricing disparities are justified 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 1. Test a documented exception versus a pattern a credit-card issuer changing line-assignment logic must defend. 2. Match the adverse-action language to the facts in SPCP written plan versus actual originations. 3. Check HMDA coding and underwriting policy against pricing disparities are justified. 4. For this Fair Lending CRA and Special-Purpose Programs file, read SPCP written plan versus actual originations against a DOJ or CFPB monitor request for pricing files and write the one fact that would move pricing disparities are justified for model-risk partner for credit scoring.

RECOMMENDATION Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Fair Lending / CRA and Special-Purpose Programs packet (SPCP written plan versus actual originations after a DOJ or CFPB monitor request for pricing files). The follow-on CRA and Special-Purpose Programs action is what model-risk partner for credit scoring does next: implement the option, assign an owner, and log the missing fact.