Algorithm Bias Denying Mortgages to Non Whites – Spotlight #413

1. Good Monday Morning

It’s February 7th, which means that National Pizza Day is on Wednesday. The Today Show helpfully published a list of national chain discounts, including delivery app Slice, which represents local shops.

Today’s Spotlight is 1,521 words — about a 5 1/2 minute read.

2. News To Know Now

Quoted:We now have evidence from law enforcement that the previously peaceful demonstration has become an occupation, with police reports of violence and other unlawful activity.“— A GoFundMe announcement last Friday that the company would refund individual donors instead of disbursing funds to COVID-19 protesters in Ottawa. The Ottawa government declared a state of emergency late last night.

a)  The Crisis Text Line, a suicide prevention hotline, has stopped sharing “anonymized data” with a for-profit partner after data ethicists were horrified to learn that they had been doing so. Politico points out that they’re not alone–even the Trevor Project allows targeted advertising. The company halted the agreement after that story made national headlines and drew questions from Congress, philanthropists, and its own volunteers.

b) NewsCorp announced last Friday that its networks had been breached and journalists targeted. The company owns The Wall Street Journal, New York Post, and Smart Money magazine and has linked the attack to China.

c) Tech earnings season wrapped up last week with Facebook posting the largest one day stock loss in history and Amazon posting the largest one day gain. Highlights:

  • Alphabet — Google’s parent posted a 32% YOY increase in quarterly revenue and finished 2021 with $76 billion in net profit. 
  • Snap — The Snapchat parent company posted its first ever quarterly profit after quarterly sales grew to $1.3 billion.
  • Pinterest —A 20% YOY increase in quarterly revenue offset news that its monthly active U.S. user count declined.
  • Facebook — Two storylines that drove Facebook stock down more than 21% last week need context. The company lost users for the first time, but it decreased from 1.93 billion daily users to 1.92 billion. The other is the $10 billion that it invested in its Reality Labs division, which includes its metaverse strategy. Even with that investment, Facebook posted a quarterly profit of $10.3 billion vs. an expected $10.9 billion. Most Facebook metrics are up even as Apple’s privacy initiatives hurt the company’s core advertising business.
  • Amazon — The Everything Company nearly doubled profit and was rewarded with a $190 billion market cap bump in only one day. Amazon also disclosed that it now owns 18% of EV maker Rivian, 5% of self-driving tech company Aurora, and 95 planes in its fleet. On top of all that news, Amazon is also reportedly exploring a deal to acquire Peloton and announced a Prime dues increase of $20 per year. It’s the second Prime increase after a four year interval. 

    Despite the flood of great Amazon news, the company had a setback after a Washington Attorney General order permanently shut the retailer’s “Sold by Amazon” program. As part of that agreement, Amazon will pay a fine of $2.25 million.

    Meanwhile, founder Jeff Bezos will pay the city of Rotterdam to temporarily dismantle a 95-year-old bridge so that his new 417 foot yacht can pass through when it launches from a shipyard there this summer. 

3. Search Engine News — Google Often Changing Titles Websites Submit 


We’ve told you before how Google has been changing the titles of webpages that it shows in its search results. The search giant says that its machine language systems will change the title of a webpage in its displays if the software calculates that it’s appropriate and closer to the user’s intent.

Search marketers were not happy about this, but the company has held fast to its decision.

Now a study conducted by search software firm Zyppy has found that Google changed those titles more than 61% of the time. Zyppy CEO Cyrus Shepherd, a well respected digital marketer, reported:

  • When titles were only 5 characters or less, they were rewritten by software 96% of the time.
  • Titles up 20 characters still had a better than 50% chance of being rewritten.
  • But titles exceeding 60 characters were also getting rewritten too often.
  • In fact, anything over 70 characters was almost always (99.9%) rewritten.

Google has also demonstrated a clear favorite in the way marketers separate phrases in titles. For years, that was a brand preference issue, but Zyppy’s data from thousands of sites shows that Google removes dashes 20% of the time and pipes (the | character) more than 40% of the time.

Part of your website’s strategy in 2022: analyze how often this is happening to your site and whether Google’s changes are helping. If they are, perhaps more than the title should change.

4. Spotlight Explainer — Algorithm Bias & Housing Discrimination

The Situation

Consumer Financial Protection Bureau director Rohit Chopra has put mortgage lenders on notice that the agency considers algorithmic lending a path to digital redlining and robo discrimination. Chopra recently testified to Congress that the agency believes that “matching consumer records solely by name” is an unreasonable standard because of algorithm bias.

He’s reacting to reports and studies from The Markup last summer that showed nonwhite homebuyers were more likely to be rejected for mortgages that white borrowers received. When nonwhites were approved for those mortgages, they also paid higher rates.

Explaining Redlining

Generally used today to describe a discriminatory practice of denying or marking up services in a specific area, the term redlining comes from color-coded maps that the U.S. government used in the 1930s. Neighborhoods with the highest risks for mortgage lenders were outlined in red and invariably contained most of a city’s African American homeowners. Redlining created an inequitable race wealth gap in the U.S. economy that McKinsey estimates at more than $1 trillion.

Breakdowns by Racial Group

The Associated Press worked with The Markup and analyzed 17 factors across more than 2 million mortgage applications. Nationally, the rates at which nonwhites were rejected when whites were approved ranged 40% more often for Latinos to 80% for Black applicants. The AP cautioned that final decisions are made by humans, but “largely driven” by software recommendations.

What’s Next for Algorithm Bias

The Department of Justice and Comptroller of the Currency have joined the CPFB in a new effort to identify and stop algorithm bias that is often codifying systemic bias created by generations of legal discrimination against women and nonwhites.

Democrats in Congress have also announced that they will introduce an updated version of the Algorithmic Accountability Act that was first proposed in 2019. That legislation would require transparent audits of AI used in finance, health care, housing, and education.

5. Did That Really Happen? — Johns Hopkins Lockdown Paper Not Peer-Reviewed

Last week conservative media outlets began touting a paper by Johns Hopkins professors that reportedly found that “lockdowns” did not mitigate the COVID-19 death toll to date.

Snopes dug in and found that the document was a working paper by three economists, not epidemiologists or medical scientists. This working paper has not been peer-reviewed and cannot be labeled a JHU study. Finally, instead of the traditional definition, these economists defined a lockdown as “the imposition of at least one compulsory, non-pharmaceutical intervention (NPI).” That means that requiring masks counts for these professors as a “lockdown.”

6. Following Up — No Movement on IRS Facial Recognition, Apple Improves Face ID

After a flurry of complaints about the IRS’ plans to require facial recognition via a third party for taxpayers who want to receive personal data online, the Treasury Department said that it would re-evaluate the idea. And as the second week of tax season closed, there was no movement on that issue, but Apple announced last Thursday that its Face ID now works when the person is wearing a face mask.

7. Protip — Import a PDF into Excel

Importing a PDF with words, numbers, or both into Excel is easier than you might think. And since tax season has begun in earnest, here is a walkthrough for you.

8. Screening Room — Matthew McConaughey’s Space

Salesforce’s new spot has McConaughey jabbing at Bezos and Zuckerberg in the same minute. See, it wasn’t just us giving them grief.

9. Science Fiction World — Google’s DeepMind Says Its System Can Code Competitively

I still think that it’s cool when my robo vacuum plugs itself back in to recharge, but DeepMind, a Google AI lab in London, says that its new AlphaCode software can write programs at a competitive level. The company says that the software ranked in the top 54% against human competitors in problems on the Codeforces platform.

10. Coffee Break — McMansion Hell

Kate Wagner’s blog is the place to go for some of the funniest annotated pictures of the dreaded McMansions. Bring a large coffee. She writes well and often.

11. Sign of the Times

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