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93 Chi.-Kent L. Rev. [i] (2018)

handle is hein.journals/chknt93 and id is 1 raw text is: CHICAGO-KENT LAW REVIEW VOLUME 93 2018 NUMBER 1 CONTENTS FINTECH'S PROMISES AND PERILS SYMPOSIUM EDITOR MATTHEW ADAM BRUCKNER THE PROMISE AND PERILS OF ALGORITHMIC LENDERS' USE OF BIG DATA Matthew Adam Bruckner 3 Tens of millions of Americans lack access to traditional forms of credit and must rely on payday and pawn loans instead. Algorithmic lending 2.0 promises to enable fintech companies to lend to those excluded from traditional forms of credit. Version 2.0 algorithmic lenders claim to use Big Data and machine learning to increase credit access by making better predictions about prospective borrow- ers' creditworthiness and decreasing the cost of credit. Supporters also claim that algorithmic lending 2.0 removes human bias from the financial services sector. De- tractors have cast doubt on both claims, arguing that there is scant evidence that algorithmic lending 2.0 expands credit access in non-predatory ways or that substi- tuting algorithms for loan officers reduces discrimination. This Article evaluates the existing regulatory framework to determine if regulation can support the promise of algorithmic lending 2.0 without imperiling the vulnerable. FINTECH'S DOUBLE EDGES Christoper G. Bradley 61 This symposium essay examines the double-edged nature of financial technol- ogies in financial transactions, especially transactions involving consumers. There are both benefits and risks-often undiscovered or hidden at first-in each new round of financial technologies. A FinTech tool may benefit consumers and then, applied later or in a different context, threaten consumer interests; a tool that harms consumer interests may then lead to development of a tool that favors them. This double-edged nature is an important but unappreciated structural fea- ture of financial technologies. From the perspective of consumer protection, then, FinTech can neither be fully embraced as friend nor restricted as foe. Rather, it must be regulated with sensitivity to various competing goals: fostering innova- tion, policing abuse, and protecting access to markets, to financial services, and to the legal system. This essay cautiously endorses several strategies: the use of pur- posive and compliance-driven regulatory frameworks; regulatory sandboxes and other experimentalist and stakeholder-participatory approaches to FinTech gov- ernance; and the development of consumer-protective and consumer-enabling FinTech. It also calls attention the issues of distributive justice and equity that arise when there are prohibitive financial or cognitive barriers to effective use of FinTech; in other words, it calls attention to the fact that access to fair participa- tion in the markets and access to justice may increasingly rely on access to FinTech.

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