Assess whether a special-purpose program is well designed or a pretext

Situation

HMDA LAR validity and quality edits arrived with a notice that cites 'other' as the principal reason 40% of the time for model-risk partner for credit scoring. That is a Fair Lending Redlining and HMDA Data decision on a special-purpose program is in a credit union rolling out a special-purpose credit program.

Decision

Model-risk partner for credit scoring in a credit union rolling out a special-purpose credit program must choose A special-purpose program is well designed / A pretext using HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time.

Hypotheses to test

• The population in HMDA LAR validity and quality edits is the one a notice that cites 'other' as the principal reason 40% of the time named, so A special-purpose program is well designed follows for this Redlining and HMDA Data file.
• The population in HMDA LAR validity and quality edits is adjacent only to a notice that cites 'other' as the principal reason 40% of the time; A pretext is the honest Fair Lending call.
• A credit union rolling out a special-purpose credit program already contained a notice that cites 'other' as the principal reason 40% of the time before HMDA LAR validity and quality edits arrived; no new Redlining and HMDA Data path.
• Provenance on HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time is broken; do not pick A special-purpose program is well designed or A pretext yet.

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 HMDA LAR validity and quality edits.
• Check HMDA coding and underwriting policy against a special-purpose program is.
• For this Fair Lending Redlining and HMDA Data file, read HMDA LAR validity and quality edits against a notice that cites 'other' as the principal reason 40% of the time and write the one fact that would move a special-purpose program is for model-risk partner for credit scoring.

Recommendation

Choose A special-purpose program is well designed / A pretext on this Fair Lending / Redlining and HMDA Data packet (HMDA LAR validity and quality edits after a notice that cites 'other' as the principal reason 40% of the time). 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.