BISG | Auto Finance News | Auto Finance News

Zest is Using Math to Comply with CFPB Disparate Impact

When you think about the greatest invention of the 20th century, a few key technologies might come to mind: the personal computer, internet, antibiotics, or the electric guitar. But, for Douglas Merrill, founder and chief executive of Zest Finance, nothing compares to the Fico score. “The Fico score is the most important innovation of the […]

Captive Uses AI Tool to Refine Underwriting, Reduce Losses

ZestFinance developed and recently launched a lender tool that uses machine learning to originate loans for thin-file borrowers, and the company is already working with one of the “Big Three” captives to implement this system for its auto originations, said Douglas Merrill, founder and chief executive of the company. The platform applies algorithms to alternative […]

4 Possible Alternatives to the CFPB’s BISG Methodology

Republican lawmakers and lenders alike are eager to roll back the Consumer Financial Protection Bureau’s guidelines on disparate impact — given the results of November’s election — but it’s unclear what would replace it, in order to mitigate discrimination in the business, said John C. Redding, partner at Buckley Sandler LLP. “There is nobody in […]

CFPB’s ‘BISG’ Algorithm Not Designed to Determine Race, Creator Says

The controversial algorithm behind the Consumer Financial Protection Bureau’s formula to determine disparate impact was originally created for healthcare research, according to an in-depth article published this week in the Los Angeles Times. The Bayesian Improved Surname Geocoding algorithm, called BISG for short, is a formula that utilizes data from the Census Bureau, and it […]