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Lending Algorithm Bias Could Get Harder to Prove Under HUD Plan

Aug. 9, 2019, 9:30 AM

Mortgage lenders that use algorithms in their credit decisions are likely to gain greater protection from fair lending lawsuits under a federal housing agency proposal.

Lenders view the plan, likely to be released later this month, as the Department of Housing and Urban Development’s long-overdue recognition of their increased use of machine learning, artificial intelligence and other technology. Consumer advocates view it as an industry-friendly litigation clampdown.

“It seems like they’re trying to recommend that no one accused of housing discrimination would ever really be liable if they’re using an algorithm,” Andrew Selbst, a legal scholar with the New York-based ...