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Citigroup Inc. Message Board

  • wareham2620 wareham2620 Mar 14, 2009 2:28 PM Flag

    Subprime loans have aided minorities

    One fact ignored was that blacks and Hispanics have worse credit than whites with similar incomes. When statistical analyses were conducted very few instances of discrimination in the accept-reject decision were found.

    Today, the situation is a bit different. Instead of accusing lenders of making too few loans to minorities, the accusation is that they make too many. The National Association for the Advancement of Colored People, in an effort to seem relevant, has filed lawsuits against a dozen lenders accusing them of lending to minorities but at higher interest rates than those offered to whites.

    Again the popular press is full of examples of blacks and whites with similar incomes, now being differentiated by interest rates. Note, however, the press says nothing of the creditworthiness of the borrowers. Higher risk borrowers pay higher interest rates. I am certain that the statistical experts will study whether the pricing decision is colorblind....

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47.19+0.32(+0.68%)10:28 AMEDT