Fair Lending in the Brave New World of Big Data

Fair Lending in the Brave New World of Big Data

In the May–June 2017 issue of ABA Bank Compliance, Marsha Courchane and David Skanderson published an article entitled "Fair Lending in the Brave New World of Big Data." The burgeoning new world of online “marketplace” lending holds the promise of broader access to credit for consumers and businesses with reduced cost and more competition. However, cutting-edge technology, data sources, and credit modeling methods also pose potential for fair lending risk – notwithstanding the fair lending benefits of automated decision-making. The authors provide an overview of marketplace lending, the “Big Data” and machine-learning technologies increasingly being used by both online and traditional lenders, and key considerations in managing fair lending risk in this brave new world. 

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