Risk Based Pricing Model - No Historical Data

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12 CFR 202.2(p) Empirically derived and other credit scoring systems.

3. Pooled data scoring systems. A scoring system or the data from which to develop such a system may be obtained from either a single credit grantor or multiple credit grantors. The resulting system will qualify as an empirically derived, demonstrably and statistically sound, credit scoring system provided the criteria set forth in paragraph (p)(1)(i) through (iv) are met. A creditor is responsible for ensuring its system is validated and revalidated based on the creditor’s own data when it becomes available.

First published on BankersOnline.com 2/09/09