4 ms·

Isn't the model a trade secret? Correct me if I'm wrong but the model is what allows the lender to optimize profit by maximizing good loans and minimizing bad o

• toomuchtodo 4y ago
  Providing model access to regulators doesn’t necessarily make the model public.
• everforward 4y ago
  Sure, but there's an argument to be made that credit is such an underpinning facet of society that it's unwise to allow the decisions to be made in darkness. The obvious example is housing, which requires a loan for the vast, vast majority of people. These decisions have concrete implications for who can buy a house, or what house, or where. Redlining could be enforced almost entirely via lending (and it was, iirc). I'm not claiming that happens currently, because I have no idea, but it's a possibility. There are also workarounds. IP law could be used to restrict competitors using the models. We could make the models be open and operating under a fee basis (i.e. the creator of the model gets 0.1% of the loan amount as a payout). There are likely other options. I see it as a parallel to utilities. They are necessary for society to function, but no one will build them out if they have to share. So we hand over a monopoly with a lot of restrictions on how they can operate. I think the same could be true here.