The Use of Machine Learning for Credit Underwriting: Market & Data Science Context

Market & Data Science Context

Report Summary

The Market & Data Science Context report surveys market practice with respect to the use of machine learning underwriting models and provides an overview of the current questions, debates, and regulatory frameworks that are shaping adoption and use. It is designed to provide a resource to stakeholders, especially non-technical ones, that explains lenders’ decisions that can promote fair and responsible use of machine learning underwriting models. 

The report focuses in particular on model transparency as a critical ingredient in allowing firms, regulators, and other stakeholders to evaluate whether and in what circumstances these models meet pre-existing requirements regarding reliability and fairness. Without sufficient transparency, neither firms nor their regulators can evaluate whether individual models are making credit decisions based on strong, intuitive, and fair relationships between an applicant’s behavior and creditworthiness. Yet the same complexity that fuels the accuracy of machine learning underwriting models can make it more difficult to understand how a model was developed and how it assessed a particular applicant’s creditworthiness.


This report is part of a broader research project on the explainability and fairness of machine learning in credit underwriting. This initiative includes empirical research being conducted with Laura Blattner and Jann Spiess at the Stanford Graduate School of Business. This report lays a foundation for that empirical research, as well as a publication which will investigate how law, regulation, and market practices may need to evolve to promote fair and responsible use of these new technologies. Many of the insights in this report were derived from interviews with stakeholders in the financial services, technology, and civil society sectors

FinRegLab would also like to recognize members of our project Advisory Board who contributed to discussions of the issues covered in this report. The Advisory Board consists of subject matter experts from computer science, economics, finance, and regulatory backgrounds. The group represents more than 40 major entities from the worlds of bank and nonbank financial services, technology, policy, advocacy, and academia. State and federal regulators participate as observers.

We would also like to thank the following individuals who provided feedback on this report.

Michael Akinwumi

National Fair Housing Alliance (NFHA)

Brad Blower

General Counsel
National Community Reinvestment Coalition (NCRC)

Dr. Marsha Courchane

Vice President, Practice Leader of Financial Economics
Charles River Associates

Peter Zorn

Senior Consultant
Charles River Associates

Steve Dickerson

Discover Financial Services

Raghu Kulkarni

Discover Financial Services

Patrick Hall

Principal Scientist

Stephen Hayes

Relman Colfax PLLC

Deborah Hellman

University of Virginia Law School

Scott Lundberg

Microsoft Research

Kevin Moss

Kevin Moss Consulting LLC

Beju Rao

Amruta Inc.

David Silberman


Scott Zoldi

Chief Analytics Officer

Talia B. Gillis

Columbia Law School

We would also like to thank the following individuals who provided feedback on this report. They include:

Kelly Thompson Cochran

Deputy Director and Chief Program Officer

Colin Foos


Mashrur Khan


Kerrigan Molland

Senior Finance & Business Operations Manager

With Support From

Flourish Ventures

Flourish, a venture of the Omidyar Group, has provided operating support to FinRegLab since its inception. Flourish is an evergreen fund investing in entrepreneurs whose innovations help people achieve financial health and prosperity. Established in 2019, Flourish is funded by Pam and Pierre Omidyar. Pierre is the founder of eBay. Managed by a global team, Flourish makes impact-oriented investments in challenger banks, personal finance, insurtech, regtech, and other technologies that empower people and foster a fairer, more inclusive economy.

Mastercard Center for Inclusive Growth

The Mastercard Center for Inclusive Growth advances equitable and sustainable economic growth and financial inclusion around the world. The Center leverages the company’s core assets and competencies, including data insights, expertise, and technology, while administering the philanthropic Mastercard Impact Fund, to produce independent research, scale global programs and empower a community of thinkers, leaders, and doers on the front lines of inclusive growth. The Center has provided funding to support this research.

JPMorgan Chase & Co.

(NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $3.9 trillion in assets and $313 billion in stockholders’ equity as of June 30, 2023. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at

Related Publications

  • Explainability and Fairness in Machine Learning for Credit Underwriting

    FinRegLab worked with a team of researchers from the Stanford Graduate School of Business to evaluate the explainability and fairness of machine learning for credit underwriting. We focused on measuring the ability of currently available model diagnostic tools to provide information about the performance and capabilities of machine learning underwriting models. This research helps stakeholders… Learn More


About FinregLab

FinRegLab is an independent, nonprofit organization that conducts research and experiments with new technologies and data to drive the financial sector toward a responsible and inclusive marketplace. The organization also facilitates discourse across the financial ecosystem to inform public policy and market practices. To receive periodic updates on the latest research, subscribe to FRL’s newsletter and visit Follow FinRegLab on LinkedIn and Twitter (X). | 1701 K Street Northwest, Suite 1150, Washington, DC 20006