Answer:
BISG stands for "Bayesian Improved Surname Geocoding." It is the algorithm and process regulators, including the CFPB, use for assigning gender and ethnicity to individual applicants and borrowers of certain loan product types. The BISG methodology evaluates the likelihood of gender and race for a specific name.
Financial institutions are not allowed to collect race, ethnicity and gender for all loan types. However, regulators expect lenders to append demographic information to all loan data so that it can be analyzed for lending disparities and evidence of discrimination. BISG allows lenders and their regulators to estimate the likely demographic information of applicants and borrowers to evaluate whether the institution is in compliance with Fair Lending.
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Email info@trupointpartners.com to learn more about BISG methodology in Fair Lending.
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