FinRegLab CEO Melissa Koide testified in the Task Force’s hearing on “Equitable Algorithms: How Human-Centered AI Can Address Systemic Racism and Racial Justice in Housing and Financial Services.”

“Research suggests artificial intelligence and machine learning can create measurable benefits including financial inclusion, yet we also know it can bake in and even exacerbate historical bias and exclusion.”

FinRegLab is working with researchers from Stanford Graduate School of Business to launch a ground-breaking evaluation of emerging market practices to improve the transparency and fairness of machine learning underwriting models in consumer credit.

“As we begin to emerge from the coronavirus pandemic, it will be more important than ever for lenders to have a more comprehensive and inclusive picture of how Americans have been managing their financial health — even in extraordinary circumstances — beyond what’s seen in the traditional credit bureau file alone.”

America’s credit system is under serious pressure as it faces the most sudden and severe downturn since the Great Depression. Our CEO Melissa Koide and former President and CEO of FICO Larry Rosenberger released an op-ed titled “Data needs to be wider-sourced and more inclusive” discussing using more financial data for lending, enhancing public policy guidance, and financial exclusion and the COVID-19 effect.

“Even though credit scores play a key role in determining who gets a mortgage and at what terms, the current credit system disadvantages a disproportionate share of low-income consumers who don’t have enough information in their credit files.”

“It is clear just a few weeks into the Biden administration that fair lending and racial equity will return as a central focus of regulators under President Joe Biden.”

“A growing consensus that the CFPB should create regulations on ensuring consumers’ safe sharing of their bank data with finance apps, such as Venmo and Mint, isn’t making the agency’s job any easier.”

We recognize the breadth of urgent issues facing the Consumer Financial Protection Bureau and the nation at this time, but believe that resolving critical questions about access to financial data would substantially benefit consumers, small businesses, and financial services providers in helping to recover from the Covid-19 pandemic, address longstanding racial wealth gaps, and make U.S. financial systems more generally inclusive, competitive, and responsive to customer needs.

The Consumer Financial Protection Bureau has issued an advisory opinion concerning the establishment of special purpose credit programs to meet the needs of underserved groups consistent with the Equal Credit Opportunity Act. It is the Bureau’s first action following on a Request for Information about ECOA issues earlier in 2020.