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Comment by chii | Hacker News Reader

> banks ... including the racial markup of their customers in decisions would be expected to perform worse than others, wouldn't they?

if a bank is including a racial markup, it may be because they believe there's more risk with that loan (which must be made up via said mark up).

If it's actually true that such a loan is riskier, then the bank acted correctly.

if it was actually wrong - that a racial mark up was unjustified financially - then a competitor bank that correctly makes this conclusion would offer the lower, correct rate, thus capturing said racial group as customer away from the more discriminating bank!

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> If it's actually true that such a loan is riskier, then the bank acted correctly.

Oh my god. We are not going to speed run racial discrimination in lending products again. Once is enough for me. This is actually specifically illegal.

> "What are the U.S. fair lending laws? Fair lending laws in the United States prohibit lenders from discriminating based on specific protected classes (such as race, color, national origin, and religion) during any aspect of a credit transaction." [1]

[1] - https://www.investopedia.com/the-history-of-lending-discrimi...

I wonder if that law has had any impact on the issue? Have there been any followup studies to verify that the targeted groups did indeed become more creditworthy?

You know I never checked. I mean it seems obvious it would but I don’t recall seeing a study.

Honestly though a study like that may be banned from most research houses as it can fall into a bad spot. What happens if the study found it didn’t help. :/

I feel like the regulations here are good regardless. I don’t Want someone to be penalized specifically because of their race.

Companies are not actually 100% soulless profit-making machines and are very capable of choosing other priorities over making what seems to be free money.

Sometimes these other priorities are "being racist" or "letting John Lasseter harass all the women at Pixar". But it's obvious just because of how many companies stay in their industry. GameStop still tries to sell you games even if that's not so profitable anymore. They don't just switch to selling heroin.

I admit I'm really struggling to get on board with "it's fine for companies to be racist so long as they make more profit, actually".

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