The Consumer Financial Protection Bureau repeated its suspicion of artificial intelligence and predictive analytics in a reasonable loaning report provided Friday that reveals a boost in actions versus redlining and inequitable practices.
The CFPB stated monetary services will be progressively formed by predictive analytics, algorithms, and artificial intelligence however that innovation can likewise strengthen “historical biases that have excluded too many Americans from opportunities.”
In the report, Patrice Ficklin, the CFPB’s reasonable loaning director, stated that while she is motivated by programs that can broaden access to credit, she is hesitant of claims that innovative algorithms are a “cure-all” that can get rid of predisposition in credit underwriting and prices. Her employer, CFPB Director Rohit Chopra, had formerly alerted business about relying too greatly on AI and artificial intelligence in making loaning choices.
Ficklin likewise kept in mind a “legacy of structural discrimination” that encompasses home loan, car, trainee, and other credit markets for individuals of color, in the report.
“The mission of fair lending is to break these discriminatory patterns and practices and to promote access to credit to create fairer markets for all,” she stated.
Last year, the CFPB provided 4 reasonable loaning actions declaring offenses of the Equal Credit Opportunity Act and referred 2 matters including accusations of discrimination to the Department of Justice, according to the 43-page report.
In 2020, under previous acting CFPB Director Dave Uejio, the firm submitted one suit and provided 4 DOJ recommendations.
The CFPB stated it will be “sharpening its focus on digital redlining and algorithmic bias.” As more Big Tech companies provide monetary product and services, the firm stated it will be working to recognize emerging dangers and to establish proper policy actions.
Ficklin likewise stated the CFPB “will continue to fight discrimination that manifests as unfair, deceptive, or abusive acts and practices,” called UDAAP offenses.
“Redlining, pricing discrimination, and appraisal bias are significant barriers to fair competition in the mortgage market, impeding the ability of an individual borrower to get credit on fair terms, thus stifling growth in communities across the country,” Ficklin composed.