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American Banker: Why this credit union says AI can reduce lending bias

American Banker, April 20, 2022, Why this credit union says AI can reduce lending bias

“A lot of times lenders are nervous about making changes to their models to improve their fairness because they’re concerned that if they make a change to their model, it may be considered a reflection that they had an unfair model before,” when the actuality is that they’re simply enhancing its accuracy, said Brad Blower, general counsel for the National Community Reinvestment Coalition, a nonprofit that advocates for fairness in lending to underserved communities.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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