CFPB Revisits Rules To Eliminate Algorithmic Bias In Home Valuations

In a review panel, the CFPB outlined its options to ensure that computer models used to help determine home valuations are accurate and fair. Those options are to be reviewed to determine their possible impact on small businesses. The CFPB expressed its concerns about implementing proper safeguards regarding automated valuation methods ("AVM") that would minimize flaws that could "further embed and perpetuate historical lending, wealth, and home value disparities."

Proposals

The CFPB considered the following proposals under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Section 1125 ("FIRREA"), under the Dodd-Frank Act, including:

• Defining AVMs used to "determine" collateral worth.