Assess whether to pause a product pending a lookback (ca2846)

SITUATION Second-review underwriter is responsible for to pause a product in a small-business desk using a new vendor score, using HMDA LAR validity and quality edits as the only working extract. A SPCP that originated almost no loans to the intended class is what reset the timeline for this Fair Lending Redlining and HMDA Data file.

DECISION Second-review underwriter in a small-business desk using a new vendor score must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using HMDA LAR validity and quality edits after a SPCP that originated almost no loans to the intended class.

HYPOTHESES TO TEST 1. Authorize Remove access or reverse the item now; HMDA LAR validity and quality edits already has the discriminator after a SPCP that originated almost no loans to the intended class. 2. Keep Temporary compensating control in force until HMDA LAR validity and quality edits is completed after a SPCP that originated almost no loans to the intended class for second-review underwriter. 3. Treat HMDA LAR validity and quality edits as Approve a documented exception because both readings appear after a SPCP that originated almost no loans to the intended class. 4. Refuse a Fair Lending close: second-review underwriter does not have the decision to pause a product turns on in HMDA LAR validity and quality edits.

ANALYSIS REQUIRED 1. Compare HMDA LAR validity and quality edits to similarly situated files, second-review notes, and reason codes after a SPCP that originated almost no loans to the intended class. 2. Flag any disparate-impact table second-review underwriter cannot explain from HMDA LAR validity and quality edits. 3. Test a documented exception versus a pattern a small-business desk using a new vendor score must defend. 4. For this Fair Lending Redlining and HMDA Data file, read HMDA LAR validity and quality edits against a SPCP that originated almost no loans to the intended class 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 / Redlining and HMDA Data packet (HMDA LAR validity and quality edits after a SPCP that originated almost no loans to the intended class). If HMDA LAR validity and quality edits cannot force a Fair Lending label under Redlining and HMDA Data, stop. If HMDA LAR validity and quality edits after a SPCP that originated almost no loans to the intended class cannot support Remove access or reverse the item versus Temporary compensating control on this Fair Lending Redlining and HMDA Data close, second-review underwriter must do not infer a control or scheme beyond the transaction and entitlement evidence.