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**NOVEMBER 9, 2023**
On the Prospect website
Brothers From Other Mothers
How poor decision-making added up to Election Day defeats for Virginia
Gov. Glenn Youngkin and Richmond Mayor Levar Stoney BY GABRIELLE GURLEY
New York Wises Up About Rats
Gotham finally discovers trash cans, while other cities get smart. BY
JACK STYLER
Can Biden's Executive Order Deliver for Care Workers?
Absent the Build Back Better bill, the fight for care workers continues
at the state level, and with Biden's executive order. BY DAVID BACON
Dayen on TAP
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**** Innovations in Racism
The CFPB fines Citibank for discriminating against ... Armenians?
People are rightly concerned about the potential for new technology to
foster discrimination. You can load parameters into an algorithm, or
allow artificial intelligence to make lending decisions based on a
statistical analysis of the creditworthiness of people with certain
characteristics, and you've created a kind of digital redlining. No
human hands would dictate the racial or gender prejudice, it would just
happen through the bot.
Regulators are attuned to this. "We have tried to make abundantly clear
that there is no AI carve-out in the nation's consumer financial
protection laws," Consumer Financial Protection Bureau director Rohit
Chopra told me in a recent interview. But an order from Chopra's
agency yesterday shows that the innovation in racial discrimination can
simply be a matter of
**who** to discriminate against.
In an enforcement action yesterday
,
the CFPB accused Citibank-not some fly-by-night operation but the
nation's third-largest bank-with violating the Equal Credit
Opportunity Act from at least 2015 to 2021, by deliberately denying
credit cards to ... Armenians. The organization had apparently decided
Armenians were all criminals prone to "bust outs," who would rack up
charges and then leave the country. The CFPB had records of employees
referring to "Armenian bad guys" or the "Southern California Armenian
Mafia."
[link removed]
So how did Citi pull off this novel racism? Was it AI? Was it machine
learning? No, they pulled any application for a credit card or an
increased line of credit whose name had an -ian or -yan suffix, or
applications around Glendale, California, home to about 15 percent of
all Armenian Americans. And then they would just deny credit to those
people, or place holds on their account, or send the application to the
fraud prevention unit, or ask for income and asset verification that
they wouldn't need for anyone else.
Supervisors and trainers instructed the line-level workers to hide this
blatantly illegal conduct, "including by telling Respondent employees
not to discuss it in writing or on recorded phone lines." They were then
told to make up fake reasons for denying credit to Armenians. If
employees didn't flag Armenian names or Glendale-area residents, they
would be reprimanded.
It turns out that racism has a history that predates AI! You may not
actually need a robot to read the last three letters of the last name,
and throw the ones with -ian or -yan in the reject pile. Sure, AI might
lead to marginally quicker discrimination, but I don't actually think
the marginal efficiency of the robot scanning the applicant's last
name or address is all that improved.
Given that there are about a half a million Americans
of Armenian descent, and not all of them bank with Citi (and none of
them will after this), the fine is relatively small. Citi agreed to pay
$1.4 million to consumers harmed by these practices, and a $24.5 million
fine. This is peanuts to a bank with $1.7 trillion in assets.
But the lesson here is that Citi is big enough that they could have
buried this "do not sell to Armenians" directive in lines of computer
code. That they went old-school and just searched for suffixes suggests
that there wasn't much to be gained from the whiz-bang algorithm. Our
zeal to regulate new and exciting developments in rip-offs and lies
should not overlook the old standby of random stereotyping. Some things
never go out of style.
~ DAVID DAYEN
**Follow David Dayen on Twitter**
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