On March 10, 2021, Allen Denson was featured on Auto Fin Journal’s podcast, Auto Remarketing, where he discussed what “digital discrimination” is and what role regulators might play.
“In order to be scored by a traditional credit bureau, you have to have a credit data footprint and you have to be actively participating in the banking system and the credit system. A disproportionate percentage of low income and historically disadvantaged minority consumers may use alternative credit products and may lack the traditional banking relationships that you would need to have a credit bureau-based score. Alternative data, in its purest sense, is looking to expand access to credit and allow creditors to make decisions about consumers who may otherwise be declined,” explained Denson.
“The other side is that when you have more data, it can be used to discriminate. That is the big regulatory concern here,” he said. “With all of this extra data that’s available now and all of the novel ways that creditors and other financial services providers are looking to use it, are we sure that we’re avoiding discrimination?”
Click here to access the podcast.