CFPB to focus on ‘digital redlining’ and algorithmic bias
The CFPB announced measures to combat prejudice in the home appraisal industry, a move supported by the NCUA.
The Consumer Financial Protection Bureau (CFPB) intends to target digital redlining and algorithmic bias in its fair lending supervision and enforcement efforts, the agency said, in its annual Fair Lending Report to Congress, released on Friday.
“While technology holds great promise, it can also reinforce historical biases that have excluded too many Americans from opportunities,” Patrice Alexander Ficklin, the agency’s fair lending director said, in releasing the report.
The agency claimed that as more technology platforms, including Big Tech firms, influence the financial services marketplace, the CFPB will be working to identify emerging risks and develop appropriate policy responses.
It noted further it is expanding examination of the use of artificial intelligence, machine learning and automated valuation models in lending. Federal law requires regulators to develop standards for automated valuation models in an effort to ensure a high level of confidence, protect against the manipulation of the data and require random sampling and testing.
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