Category: Interesting Topics

Accuracy of Explanations of Machine Learning Models for Credit Decisions

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This white paper creates a framework for using synthetic data sets to assess the accuracy of interpretability techniques as applied to machine learning models in finance. The authors controlled actual feature importance using a synthetic data set and then compared the outputs of two popular interpretability techniques to determine which was better at identifying relevant features, finding variation in results.

Andrés Alonso and José Manuel Carbó, Banco de España

Reducing the Black-White Homeownership Gap through Underwriting Innovations

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This study updates mortgage market developments in the use of cash-flow information from bank accounts and utility, telecommunications, and rental payments history. The report highlights issues concerning data collection, standardization, and consumer protection regulation when using non-traditional financial data sources, as well as the impact of pricing, servicing, and regulation in determining whether the use of such data sources enhances racial equity.

Jung Hyun Choi et al., Urban Institute

Credit Counseling and Long-Term Credit Outcomes: Evidence from the National Foundation for Credit Counseling’s Sharpen Your Financial Focus Program

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This study analyzes five-year credit outcomes for consumers who participate in credit counseling and in some cases enroll in debt management plans (DMPs) using data from a national initiative by the National Foundation for Credit Counseling.

Adrienne DiTommaso and Stephanie Moulton, The Ohio State University

Explaining Racial Disparities in Personal Bankruptcy Outcomes

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This paper examines the role of racial bias in contributing to disparities in consumer bankruptcy outcomes. Using a deep learning model trained on voter registration data to impute race in their analysis of bankruptcy filings between 1990 and 2022, the authors find that Black filers are more likely to have their cases dismissed without any debt relief under both Chapter 13 and Chapter 7 than White filers.

Bronson Argyle et al.

Lessons Learned from Mortgage Borrower Policies and Outcomes during the COVID-19 Pandemic

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This study analyzes the aggregate impacts of mortgage forbearances and the Federal Reserve’s large-scale asset purchase program through Q3 2021 with a particular eye toward effects on different racial and ethnic groups.

Kristopher Gerardi, Lauren Lambie-Hanson, and Paul Willen; Federal Reserve Bank of Boston Current Policy Perspectives

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