The Future of Lending

In 2014, the former chairman of the Federal Reserve, Ben Bernake – the man who was once responsible for setting the United States’ interest rate policy – was summarily rejected by his bank when he tried to refinance his mortgage. The reason: he just changed jobs, which, according to an anachronistic credit metrics, indicated an intolerably heightened credit risk.

The credit analysis did not weigh his future earning potential – he was gainfully employed by a think tank and had just signed a one million dollar book deal. In fact, even the most cursory web search would have revealed that refinancing Ben Bernake’s Washington, DC house is one of the safest bets a local bank could make.

Download the full article by Drew F. Cohen