From: "Timothy C. May" <tcmay@got.net>
Date: Wed, 11 Dec 1996 21:50:31 -0800 (PST)
To: cypherpunks@toad.com
Subject: Re: Redlining
In-Reply-To: <3.0.32.19961211232644.006a1994@execpc.com>
Message-ID: <v03007802aed54e0ec7ae@[207.167.93.63]>
MIME-Version: 1.0
Content-Type: text/plain


At 11:26 PM -0600 12/11/96, Matthew J. Miszewski wrote:
>-----BEGIN PGP SIGNED MESSAGE-----
>
>>Nor is it to me. So neither of us will likely object to the neural
>>net-based lending programs which feed in a bunch of applicant data points,
>
>You will not get objections from me either.  I would advise the banks to
>make sure they accept all applicants and widely distribute the
>announcement.  I would like them to make extra efforts to examine the
>potential market in historically redlined areas.  I am not suggesting
>forcing them to do so legislatively.  I never suggested a quota system.
>
>My point is not that inputing all data you will get equivalence between
>creditworthiness and racial makeup.  My point is that redlining exists and
>I would favor the elimination of the practice.  Given a good program that
>somehow magically gets to all potential debtors would have the result I
>intend.  Not a quota system.  Equal access to capital.

You're jumping to a lot of conclusions. In fact, the neural net program
might well "rediscover redlining." Redlining is, after all, a rational
response to a situation in which data are murky, competition for loans is
strong, and the consequences of bad loans are serious.

(I recall reading around 1986 that such "black box" loan programs were in
fact "concluding" that loans to certain zip codes were not desirable.)

"Equal access to capital" remains the nonsense it has been in all of these
posts between Matthew and Red Rackham, and I won't get started on it here.

--Tim May

Just say "No" to "Big Brother Inside"
We got computers, we're tapping phone lines, I know that that ain't allowed.
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Timothy C. May              | Crypto Anarchy: encryption, digital money,
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