The Consumer Financial Protection Bureau has faced criticism for charging that lender practices could lead to instances of disparate impact while not detailing how the bureau determines a borrower’s race or ethnicity. This week, the agency took a step toward greater transparency, publishing a 36-page document detailing the agency’s proxy methodology, which is based on Bayesian Improved Surname Geocoding or BISG.
Attorney Michael Thurman, founder of Thurman Legal, told Auto Finance News, “They’re trying to fill in the blanks, to give the companies guidance on how they’re going about evaluating the lenders, making it so the companies can easily conduct their own evaluations and determine whether or not they have potential problems, and be in a better position to respond to those problems.”
