by Tracy Jan, Washington Post
November 14, 2018
University of California at Berkeley researchers  found that algorithmic credit scoring using big data is no better than humans at evening the playing field when it comes to determining home mortgage interest rates.
Both online and human lenders earn 11 to 17 percent higher profits off minority borrowers by charging African Americans and Latinos steeper rates, the study said. Black and Latino consumers pay 5.6 to 8.6 basis points higher interest on home purchase loans than their white or Asian counterparts with similar credit profiles — no matter whether they obtained their loans through a face-to-face process or online. The effect is smaller when it comes to refinancing, with black and Latino borrowers paying 3 basis points more.