Assess whether to pause a product pending a lookback (5aa419)

SITUATION After a vendor score change with no disparate-impact test, geographic application and origination heat map is what second-review underwriter can touch in a credit union rolling out a special-purpose credit program. Fair Lending will live with Remove access or reverse the item versus Temporary compensating control on this Examination and Notices file.

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 geographic application and origination heat map after a vendor score change with no disparate-impact test.

HYPOTHESES TO TEST 1. Second-review underwriter can defend Remove access or reverse the item from geographic application and origination heat map after a vendor score change with no disparate-impact test in a Fair Lending challenge. 2. Second-review underwriter cannot defend Remove access or reverse the item from geographic application and origination heat map; Temporary compensating control is what the extract actually supports after a vendor score change with no disparate-impact test. 3. A vendor score change with no disparate-impact test never reached the population in geographic application and origination heat map — reopen intake, do not close to pause a product. 4. Two facts in geographic application and origination heat map after a vendor score change with no disparate-impact test conflict for second-review underwriter; hold this Examination and Notices file.

ANALYSIS REQUIRED 1. Compare geographic application and origination heat map to similarly situated files, second-review notes, and reason codes after a vendor score change with no disparate-impact test. 2. Flag any disparate-impact table second-review underwriter cannot explain from geographic application and origination heat map. 3. Test a documented exception versus a pattern a credit union rolling out a special-purpose credit program must defend. 4. For this Fair Lending Examination and Notices file, read geographic application and origination heat map against a vendor score change with no disparate-impact test and write the one fact that would move to pause a product 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 (geographic application and origination heat map after a vendor score change with no disparate-impact test). 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.