Although the U.S. Equal Credit Opportunity Act prohibits discrimination in mortgage lending, biases still impact many borrowers. One 2021 Journal of Financial Economics study found that borrowers from minority groups were charged interest rates that were nearly 8 percent higher and were rejected for loans 14 percent more often than those from privileged groups. When these biases bleed into machine-learning models that lenders use to streamline decision-making, they can have far-reaching consequences for housing fairness and even contribute to widening the racial wealth gap. If a model is trained on…
