Redlining laws are outdated. If an ML algorithm selects zip code as a predictor of credit risk, it's because it is, not because the algorithm is using it as a cover for racism. Duh!
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But isn’t statistical (optimal) discrimination still unfair to a person?
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Of course. Imaging having rich parents was correlated w being good at statistics and we have no real stats features. But imagine you are a great statistician w poor parents. Algorithm chooses someone worse than you because they got rich parents. Of course that is unfair no?
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Something like that happened in UK after cancellation of exams for university. An algorithm was used that considered past success of students at a given school, and as a result, exceptional students from poor schools were not being selected.
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