Kinja reply list

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The Dread & Fear of KingsHamilton Nolan
7/19/16 11:40am
It’s fundamentally unfair for banks to underwrite risk.

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  Archer>PicardThe Dread & Fear of Kings
  7/19/16 11:42am
  HamNo thinks facts are racist.
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  BlockThe Dread & Fear of Kings
  7/19/16 11:44am
  This lack of lending is not fully explained by differences of income, meaning that credit is flowing more to neighborhoods with higher percentages of white residents with the same income profile.
  
  Did you even read the article before posting your irrelevant infographic?
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Promnight Dumpster Baby FireHamilton Nolan
7/19/16 11:38am
Is the existence of a statistical disparity really racism, if in fact it is not caused by or related to any racial animus, but instead is caused, as stated in the headline, by the real economic disparity, and educational disparity, and yes, credit rating disparity, between groups? I can say one thing, no one in business turns away business because they don't like black people's money. Business people aren't out to deny blacks credit, or to overcharge them for credit. They are out to take advantage of everyone they regardless of race creed or color.
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  Burner1523Promnight Dumpster Baby Fire
  7/19/16 11:46am
  yeah this is my take, as well. Just happens that these largely very poor areas are black.
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  BlockBurner1523
  7/19/16 11:49am
  No. It says right in the article that black people with the same credit and income as white people are given worse loans or denied.
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Pearl Bensey nee LesterHamilton Nolan
7/19/16 11:43am
Redlining still exists. Lending discrimination still exists. The black tax (high rates on loans than whitefolks with commensurate credit) still exists. And what happens is my traditionally black neighborhood is becoming an “up and coming” one (read: white people deign to move here). Why? Because when predatory lenders fucked over so many black homeowners in ‘07, other black people couldn’t even get a loan to move over here. Like, I kept hearing my white colleagues talking about what a “steal” these American Four Square homes were and, sure enough, 3rd year teachers were able to move in. And this is where things get dicey.

So much talk is about the “gentrification” of historically minority places, but no one’s talking about the fact that it is simply white skin that determines if the neighborhood is getting “less sketch” and more attractive to new businesses, city planners and the like. Why does my $80 grand a year as a teacher not “gentrify” my area, but a mid-sixties IT dude and his SAHM wife does? This is how pernicious bigotry is. Everything is simply “better” because they deem it worthy to be here. Meanwhile, I probably wouldn’t even be able to get a decent loan to re-purchase my own damn house if it were up for sale. Fix it, ‘Murica. This shit is getting old.
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  Burner1523Pearl Bensey nee Lester
  7/19/16 11:50am
  ehh there’s a lot of white trash areas out there that are never going to be gentrified because they're in the sticks. Most of these great city neighborhoods became black due to white flight. When college educated black guys with 100k salaries move to East New York that’s still gentrification, it’s just more noticeable when a goofy white dude moves in.
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  NicoBurner1523
  7/19/16 12:11pm
  But white trash neighborhoods aren’t really looked at the same way... no one says a white trash neighborhood is "sketchy", they're just dirty.
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benjaminalloverHamilton Nolan
7/19/16 11:47am
You’d think that these things would be getting incrementally better over time, but they’re really not. The disparity in rates of home ownership between white and non-white Americans is virtually identical to 20 years ago. Every time non-white Americans inch their way up the ladder, there’s a market “correction” that disproportionately affects them, and back down to the same old rate they go.

http://www.infoplease.com/ipa/A0883976.h…
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  ReburnsABurningReturnsbenjaminallover
  7/19/16 12:05pm
  Worth noting that no matter how effectively you could stamp discrimination out of lending policy, there’s a bit of a chicken and egg problem when it comes to the impact of a recession/real estate price declines on homeownership.
  
  If black people, on average, have lower household wealth, when there is a market correction, it follows that they would be disproportionately impacted because things like liquid assets are very crucial to surviving a downturn with either your job intact or with enough liquid assets to avoid a foreclosure if you lose your job.
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  benjaminalloverReburnsABurningReturns
  7/19/16 12:10pm
  This is a situation where yes, black Americans are the first to lose in an economic downturn because of their lower average wealth, but also, they’re being discriminated against for mortgages relative to whites when they actually do have that wealth.
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ARP2Hamilton Nolan
7/19/16 11:47am
So, blacks are often driven to higher cost mortgages, even with the same income and credit profile; they are less likely to be hired, even with identical qualifications (they rate below whites, who have a criminal conviction, compared to a black person who does not); they are more likely to be stopped by police for minor infractions or subjective infractions; they are more likely to be fined or sentenced more, when they are arrested (even with a similar background); they are more often turned down for housing; they are more often turned down for AirBnB, Uber, and other “gig economy services; they make less money for the same jobs; they are disciplined more harshly in schools, etc.

...but they have stop whining, stop being ‘professional victims,’ bootstraps, earn their freedom (or the benefit of the doubt), etc.
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  HOLPosterARP2
  7/19/16 12:34pm
  I asked someone else who reposted this but I’ll ask you...can you share any numbers that back these claims up? I’m not attacking your thoughts or you and I’m not saying its not true, but showing the actual statistics is far more powerful than just saying something is a certain way.
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  ARP2HOLPoster
  7/19/16 12:59pm
  Here are a few. I’d suggest google for the rest.
  
  http://www.nytimes.com/2012/07/13/bus…
  
  http://www.npr.org/2016/04/26/475…
  
  http://www.ibtimes.com/airbnb-while-b…
  
  http://www.bbc.com/news/blogs-tre…
  
  http://www.brilliant-corners.com/post/hailing-w…
  
  http://www.politifact.com/punditfact/sta…
  
  However, here a study that says there wasn’t a meaningful difference- for the first stage of applications (which are often machine sorted) http://www.chicagotribune.com/business/ct-bi…
  
  http://www.nytimes.com/2013/06/12/bus…
  
  Original study from the above- http://portal.hud.gov/hudportal/HUD?…
  
  Sorry- I missed one: Auto loan discrimination: http://fortune.com/2016/02/03/toy…
  
  http://www.consumerfinance.gov/about-us/newsr…
  
  https://www.ncjrs.gov/pdffiles1/nij/…
  
  http://trac.syr.edu/whatsnew/email…
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ReburnsABurningReturnsHamilton Nolan
7/19/16 11:53am
A few things worth noting:

1. The mechanism that regulators use to try and prevent this kind of discrimination is largely based on monitoring branch based lending activity for retail banks. It would be entirely possible for a bank to score well from a branch perspective, but due to a shrinking “brick and mortar” footprint, still have a fairly disparate origination portfolio.

This is especially true if you theorize that internet access and overall internet literacy/trust is less prevalent in more minority concentrated areas. To really have the most complete and full access to what is a pretty competitive origination market in 2016, many consumers need to have internet connectivity and to be at least adequate users of the internet.

2. Using income as the sole variable to test for discrimination probably doesn’t cut it in 2016 with the adjustments the CFPB has made to TILA. If you truly want to understand the extent to which discrimination exists in lending, you have to adjust for everything from starting liquid assets, credit scores, length of time at their current job and current income level, and back end ratios that take into account substantially all of a borrower’s debt obligations to understand exactly how much discrimination exists in mortgage lending in 2015. Banks are now required by law to evaluate all of those things when considering an extension of credit.
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  Low Information BoaterReburnsABurningReturns
  7/19/16 12:10pm
  It’s funny, with HMDA reporting requirements, automated underwriting systems, ATR and QM guidelines that mostly standardize credit policy across the industry, and a compensation structure that incentivizes making lots of small loans over a few big loans, you’d think that at least the big companies would only see the dollar signs and realize there is no margin in redlining. Yet I still see large settlements and consent orders on the regular from the biggest players in the game for discriminatory impact, if not outright discrimination. I don’t know how or where it works its way into the system, but it’s definitely there.
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stuckinthegreyswithyouHamilton Nolan
7/19/16 11:38am
I had the misfortune of living in the St. Louis area for 5 years and it was one of the most racist cities I’ve ever encountered. I’m so happy that I was able to move away from there.
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  RageAgainstTheMateenCleavesstuckinthegreyswithyou
  7/19/16 12:08pm
  From Black to White or White to Black or Both?
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  stuckinthegreyswithyouRageAgainstTheMateenCleaves
  7/19/16 12:30pm
  Both, really. Although, I’m Asian and mainly interacted with whites so I could hear a lot of their unfiltered remarks about blacks, which disgusted and shocked me. I grew up about 200 miles north in Central Illinois in a city that is 25% black and there wasn’t anywhere near the amount of racial tension there as there was in St. Louis.
  
  Both races were mostly nice to me, although the racial tension reached its tipping point during the Ferguson riots. I moved away from the area at the end of 2014.
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HoldMeCloserTonyDanzigHamilton Nolan
7/19/16 11:50am
Just about every study I’ve seen on this in the last five years points to the #1 factor being credit rating, not race. I’m on mobile so I can’t link it, but a few years ago there was a large multi-regional study that indicated essentially equal probability of approval given equal credit rating and downpayment (eg a black couple with a 700 credit rating, income of $X and 20% down were approved with the same interest rate at the same frequency as a white couple with similar financials). We can debate racial bias in credit ratings, but that is an entirely difference issue.

As a side note: multi-regional studies are always the gold standard. The linked study examines a region (the western suburbs of St Louis) that has primarily a middle class white population and a primarily poor non-white population. Guess what? They found a difference in economic outcome - **surprise** - money makes a difference in America! A better study would be to compare the western St Louis suburbs with an area with endemic white poverty, say somewhere in the rust belt or the broader Appalachia region. If you want to make a broad argument about racial bias driving economic outcomes, you need to control for the economics of the local population. Then you could get some interesting results worthy of real policy conversation.
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  Burner1523HoldMeCloserTonyDanzig
  7/19/16 11:52am
  yep, and even then you’d need to look at how many people applied to how many were approved for how much. Renting vs buying can be a cultural thing, too.
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Quint the GreyerHamilton Nolan
7/19/16 11:47am
I am assured this would all be fixed if one wears ones trousers at the correct elevation.
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WhatthefoxsaysHamilton Nolan
7/19/16 11:57am
The report itself states that median income is a better predictor of mortgage activity than race. This may result in de facto discrimination but that’s a far cry from what the title is suggesting.
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