Fairness-Constrained Collections Policies: A Theoretical Model with Off-Policy Evaluation

This paper proposes a theoretical model for fairness-constrained collections policies using off-policy evaluation. Using simulated credit bureau-style data (including credit scores, delinquency, repayment behavior, and demographic attributes), we compare a baseline credit score–driven policy against a fairness-constrained policy that ensures equitable approval rates across groups. The results highlight the trade-off between repayment efficiency and demographic parity, providing insights into practical implementation of fairness in credit risk management for large-scale financial institutions.