The Score on Credit Scoring in Small Business Lending

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The Score on Credit Scoring in Small Business Lending

The article "The Score on Credit Scoring in Small Business Lending" provides information about the Community Reinvestment Act and credit scoring and describes research findings that refute claims that credit scoring allows banks to discriminate against small business borrowers in low- and moderate-income neighborhoods.

What behavior does the Community Reinvestment Act require of banks? What tests are applied to assess a bank’s compliance with the Act?
What is credit scoring?
Why do critics believe credit scoring increases discrimination in lending?
What evidence is there to support the claim than credit scoring does not increase discrimination in lending?

Source: "The Score on Credit Scoring in Small Business Lending." Federal Reserve Bank of Atlanta EconSouth, Third Quarter 1999, pp. 8-12.

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