There are two scenarios: Someone whose FICO score indicates more risk than Affirm's algorithm, and someone whose FICO score indicates less risk than Affirm's algorithm.
Affirm chooses a rate based on its algorithm's prediction, and I believe worst case just offers standard FICO-based rates... because it has a slightly different business model, it has no incentive to ding customers with a $15 fee if they pay the third payment three days late.
You're oversimplifying the issue here. The point is that Affirm is apparently using an amalgamation of potentially thousands of data points to make decisions about creditworthiness. Some of these data points, including name, email and mobile number, as well as behavioral factors, could very well prove to be proxies for characteristics which the law prohibits lenders from using to make credit decisions.
Interesting. At some level things like income could be considered a proxy as well... arguably the absence some of the more stringent consumer lenders, like Chase, on one's credit report might predict membership in a disadvantaged group.
Affirm chooses a rate based on its algorithm's prediction, and I believe worst case just offers standard FICO-based rates... because it has a slightly different business model, it has no incentive to ding customers with a $15 fee if they pay the third payment three days late.