We have seen that some form of credit scoring or automated underwriting is being used in this area but is far from standardized, so that borrowers do not know how much they should pay. This is important for persons who live in older housing that could or should be fixed up at a reasonable price or who could have much lower priced access to emergency cash that they do now. We know that automated underwriting has been in place in credit card lending for several years. We have heard mainstream lenders argue that the reason they do not provide unsecured small loan service in the inner city is that credit cards are the product designed for that purpose. The increased use of automated underwriting has a potential to improve fair lending overall, but, at the same time, it raises many questions.
Careful scrutiny is in order.
I appreciate the opportunity to talk to this knowledgeable audience on this extremely important topic. I hope that the discussions at this conference will help us all move toward answers to the many questions posed about automated underwriting and, ultimately, move toward making credit more accessible and fairer for all.