Silicon Valley Could be Ruining Fintech

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By Dusty Wunderlich
Remember that friend from college who never quite matured out of the “party every weekend” mentality? Who defaulted on every student loan? Who thinks a good job is measured by how well it accommodates hangovers? Facebook does. And it might ruin your chance to get your next loan.

Facebook recently updated a patent it has held since 2010. It’s primarily used to prevent users from spamming each other. But when updating with the United States Patent and Trademark Office, Facebook described a new use that could allow lenders to analyze the credit score of a loan applicant’s Facebook friends. The more creditworthy your friends are, the more likely you are to get a loan.

Such a plan isn’t without reason, but this particular idea bodes poorly for Facebook — another example of Silicon Valley’s failed approach to entering regulated industries.

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