I’m not super happy with the lack of supporting data, just colorful graphs and a lot of emotional anecdotes but there is a clear disparity that I think warrants greater investigation. I love the credit union movement and was shocked to read this article. I would love to hear your opinions lemmings!
How would a bank or credit union even know what racial background a loan applicant comes from? I have a mortgage, and I’ve had auto loans and personal loans in the past. Not once did I ever see a bank employee face-to-face, even for my mortgage.
A suppose the sound of a person’s voice or their name could give some clues on certain occasions.
Creditors have access to your entire life in the background. So even if your loan application doesn’t have race/ethnicity on it, your credit file sure as hell does.
Equfax knows a whole lot about you, more than just your race.
They run your information against a number of services when you apply for a loan. That data is 100% available to them. Source: I work with this data daily.
Like the author says this is probably due to how automated systems were trained. They weren’t made to be racist, but based on certain traits are more likely to reject, and that ends up making them discriminate against black applicants. I’m thinking: neighborhood, street, schools attended, stuff like that.