The issue of lending practices that have long affected minority groups is currently being addressed by Stratyfy, a fintech company that has taken advantage of the AI trend.
Stratyfy, a machine learning platform that facilitates fair credit underwriting judgments and helps to ensure that lending methods are not prejudiced, has partnered with the Beneficial State Foundation for the Underwriting for Racial Justice (URJ) to ensure fair, unbiased lending practices, according to a press release.
Laura Kornhauser, co-founder, and CEO of Stratyfy, expressed her gratitude for the opportunity to collaborate with the Beneficial State Foundation on this innovative project in a statement, according to ESSENCE.
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“The innovative lenders selected for the URJ program are redefining how people of color in their communities are able to access credit, and Stratyfy is the technology chosen to deliver the collective insights and recommended actions to make it happen!” she said.
Erin Kilmer Neel, executive director and chief impact officer of Beneficial State Foundation, also noted that “Stratyfy is a key partner in this effort, using their credit risk solution to help lenders confidently make bold and meaningful changes while managing risk and meeting regulatory requirements for safety and soundness.”
The Underwriting for Racial Justice initiative was established by the Beneficial State Foundation to assist lenders in the process of expanding access to fair credit.
Black borrowers are more likely than any other racial group to be approved for high-interest loans, receive credit cards, or buy a home, according to a Brookings study.
According to the Beneficial State Foundation, the program brings together more than 60 underwriters, impact leaders, regulators, innovators, and borrowers of color from all around the United States to develop strategies for increasing the BIPOC community’s access to credit through financial institutions.
Twenty lenders will have access to Stratyfy’s resources under the two-year pilot initiative, including Beneficial State Bank, Community Vision, Washington State Employees Credit Union, New Orleans Fireman’s Federal Credit Union, Twin Cities Habitat for Humanity Lending, Inc., Urban Redevelopment Authority, Vermont Community Loan Fund, and Working Solutions CDFI, among others.
The success of this collaboration will bring some form of relief to the financial stressors in minority communities because according to a McKinsey & Co. study, Black, Latino, or Hispanic Americans might save up to $40,000 in lifetime savings by taking advantage of financial institutions’ donating options.
