Facebook Patents a Technology That Could Use Your Social Network Against You
All that data Facebook has been gathering on you and your friends could someday be used to approve -- or deny -- your application for a loan.
Facebook was just granted an updated technology patent for “authorization and authentication based on an individual's social network.” This innocent-sounding technology can no doubt be applied in a multitude of ways, many of them benign. But one troubling use of the technology consists of assisting lenders in discriminating against a borrower based on his or her social network connections.
The patent application explains that a lender can use the technology to examine the credit ratings of members of the social network of the individual who is applying for a loan. If the average credit rating of the social network reaches a minimum, pre-defined level, the lender moves forward with the loan process. If the average credit score is too low, the loan application is rejected.
Related: Now Facebook Wants to Know Where You Buy Your Toothpaste
The new technology raises concerns about potential unjust bias, but banks would most likely use it as an additional factor in the loan approval process, not as an end-all metric. The Equal Credit Opportunity Act imposes strict guidelines as to what factors creditors can use when determining whether to approve a loan. It’s unclear if Facebook’s new technology falls under the criteria the federal law defines – things like income, expenses, debt and credit history.
Another fear involves predatory lenders. People rejected for loans through this process would make a nice customer list for unscrupulous financial operators.
Some of the less worrisome uses of the technology include preventing spam email and inappropriate content and improving the accuracy of searches. At this point, it’s not clear how Facebook plans to implement the new technology. Let’s hope the social networking giant stays on the sunny side of the street on this one.
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Treasury Pulls a Paper That Contradicts Mnuchin’s Corporate Tax Argument
The Treasury Department has taken down from its website a 2012 analysis that found that business owners and shareholders — not workers — bear most of the burden of corporate taxes. The findings of the report run counter to the argument Treasury Secretary Steven Mnuchin has been making in selling the benefits of a reduction in the corporate tax rate. The Trump administration’s tax reform framework calls for dropping the corporate rate from 35 percent to 20 percent.
The 2012 report from the Office of Tax Analysis found that “workers pay 18 percent of the corporate tax while owners of capital pay 82 percent” — figures that are “in line with many economists’ views and close to estimates from the nonpartisan Joint Committee on Taxation and Congressional Budget Office,” according to The Wall Street Journal.
A Treasury spokeswoman told the Journal: “The paper was a dated staff analysis from the previous administration. It does not represent our current thinking and analysis.”
Jason Furman, who was chairman of President Obama’s Council of Economic Advisors, tweeted that the goal of the technical paper series that included the removed study “was to be more transparent about the methodology Treasury used for its modeling and analysis.”
Treasury website has 40+ yrs of Tax Working & Technical Papers. This is the only one removed https://t.co/QzLTSHderk https://t.co/MFZRd7HoFQ
— Jason Furman (@jasonfurman) September 29, 2017