Weekly Fintech Focus
CFPB Consumer Complaint Analysis Shows Higher Complaints from Minority Communities
The Consumer Financial Protection Bureau (CFPB) issued a bulletin on a recent analysis of complaints received over the past two years. This analysis showed that on a per capita basis, the CFPB received more complaints from consumers living in predominantly minority counties than from consumers in predominantly white, non-Hispanic counties. Counties with the highest percentage of minority residents reported complaints at a rate four times that of counties with the lowest percentage of minority residents. Predominantly minority counties submitted more complaints on a per capita basis than almost every product category on which the CFPB receives complaints. Notably, credit or consumer reporting appears to be a significantly more troubling issue for predominantly minority counties based on the complaints data. Going forward, the CFPB intends to expand demographic collection to include household size and income to better understand the demographics of those affected by issues with consumer financial products.
Fintech companies often design their products for the unbanked or underbanked or otherwise target underserved communities. As a result, there is likely overlap between communities served by fintech companies and the communities that are submitting the most complaints to the CFPB. This bulletin can serve as both a warning to be aware of how consumer financial products are offered and delivered to predominantly minority communities, as well as an opportunity to develop products and services that target the needs of populations that may be underserved or mistreated by the current financial options available to them.
FDiTech to Host Office Hours of AI/ML Tech
The Federal Deposit Insurance Corporation’s (FDIC) technology lab (FDiTech) announced that it will host virtual office hours regarding technological innovations in the business of banking. The office hours will be hour-long, one-on-one sessions with the new FDIC Chief Innovation Officer Sultan Meghji. FDiTech intends to evaluate and promote the use of innovative technologies in banking to improve the U.S. banking industry’s efficiency, effectiveness, and stability, and to better serve consumers. In this first series of office hours, the FDiTech intends to address artificial intelligence and machine learning (AI/ML) related to bank back office processes, BSA/AML compliance, credit underwriting (with a focus on bias), and cybersecurity. You can sign up for these office hours by emailing email@example.com no later than May 24, 2021, with office hours beginning the week of June 14, 2021.