I know how you feel. Sometimes it seems like you have to be a computer wiz to stay current with the latest and greatest digital improvements used to originate loans. I’ll explain the CFPB’s proposal. Hopefully, it will give you a better understanding.
The proposal involves potential requirements to prevent “algorithmic” bias in home valuations. The word “algorithmic” just means a set of concise rules that must be followed, for instance, in doing calculations. It has come to be associated with computer science, but it’s actually a term used in many disciplines.
Let’s refer, then, to the proposal as involving “Algorithmic Bias,” which, in fact, is the CFPB’s terminology. The Bureau's proposal is entitled Consumer Financial Protection Bureau Outlines Options to Prevent Algorithmic Bias in Home Valuations.
Categorically, the proposal involves compliance management, ECOA (Regulation B), fair Lending, Fintech (Financial Technology), and Real Estate Appraisals. You can comment on the proposal at the CFPB. All potentially affected entities will have the opportunity to comment once these new AVM rules are proposed.
