Model-risk partner for credit scoring must resolve whether pricing

Situation

Model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program has one working extract — SPCP written plan versus actual originations — after an underwriter chat that used coded language. If SPCP written plan versus actual originations cannot support pricing disparities are justified, the honest Fair Lending output is hold.

Decision

Model-risk partner for credit scoring 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 SPCP written plan versus actual originations after an underwriter chat that used coded language.

Hypotheses to test

• An underwriter chat that used coded language is noise around an already-controlled Redlining and HMDA Data process in a credit union rolling out a special-purpose credit program, given SPCP written plan versus actual originations.
• An underwriter chat that used coded language 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.
• SPCP written plan versus actual originations shows a one-file miss after an underwriter chat that used coded language, not a Redlining and HMDA Data program failure.
• SPCP written plan versus actual originations cannot decide pricing disparities are justified yet after an underwriter chat that used coded language; hold is the only Fair Lending close a credit union rolling out a special-purpose credit program can defend.

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 SPCP written plan versus actual originations.
• Check HMDA coding and underwriting policy against pricing disparities are justified.
• For this Fair Lending Redlining and HMDA Data file, read SPCP written plan versus actual originations against an underwriter chat that used coded language 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 / Redlining and HMDA Data packet (SPCP written plan versus actual originations after an underwriter chat that used coded language). The follow-on Redlining and HMDA Data action is what model-risk partner for credit scoring does next: implement the option, assign an owner, and log the missing fact.