Closing the Racial Gap in Financial Services: Balancing Algorithmic Opportunity with Legal Limitations
Julia F. Hollreiser
This Note will explore the potential for financial institutions to use fintech to address race-based financial inequality while also being attentive to the possibility that seemingly innocuous technologies can generate biased banking practices against minority communities. Part I of this Note will discuss the history of the inequitable distribution of wealth in the United States and race-based gaps in access to financial services and products. Part II will then identify various techniques that financial institutions have used to target minority consumers. It will discuss the legality of those techniques under existing regulations, statutes, and case law. Part III of this Note will describe the role that algorithms, big data, and artificial intelligence have come to play in credit assessment and lending decisions, focusing on the risks inherent in algorithmic decision-making and the potential for these decisions to generate racially discriminate results. Part IV will then explore the opportunity for algorithmic lending in fintech to close the racial gap in financial services while still operating within the broader legal landscape.