TY  - UNPD
A1  - Langenbucher, Katja
T1  - Consumer credit in the age of AI – beyond anti-discrimination law
T2  - LawFin working paper ; No. 42, ECGI Working Paper Series in Law ; Working Paper N° 663/2022
N2  - Search costs for lenders when evaluating potential borrowers are driven by the quality of the underwriting model and by access to data. Both have undergone radical change over the last years, due to the advent of big data and machine learning. For some, this holds the promise of inclusion and better access to finance. Invisible prime applicants perform better under AI than under traditional metrics. Broader data and more refined models help to detect them without triggering prohibitive costs. However, not all applicants profit to the same extent. Historic training data shape algorithms, biases distort results, and data as well as model quality are not always assured. Against this background, an intense debate over algorithmic discrimination has developed. This paper takes a first step towards developing principles of fair lending in the age of AI. It submits that there are fundamental difficulties in fitting algorithmic discrimination into the traditional regime of anti-discrimination laws. Received doctrine with its focus on causation is in many cases ill-equipped to deal with algorithmic decision-making under both, disparate treatment, and disparate impact doctrine. The paper concludes with a suggestion to reorient the discussion and with the attempt to outline contours of fair lending law in the age of AI.
T3  - LawFin Working Paper - 42 
KW  - credit scoring methodology
KW  - AI enabled credit scoring
KW  - AI borrower classification
KW  - responsible lending
KW  - credit scoring regulation
KW  - financial privacy
KW  - statistical discrimination
Y1  - 2022
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/65245
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-652452
UR  - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4275723
N1  - JEL-Klassifikation: C18 Methodological Issues: General
PB  - Center for Advanced Studies on the Foundations of Law and Finance, House of Finance, Goethe University
CY  - Frankfurt am Main
ER  -