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At 1/28/09 04:36 PM, Al6200 wrote:

At 1/28/09 09:20 AM, RubberTrucky wrote: This reminds me of my econometrics class this year. Even on the examinations we had to determine wether blacks are significantly denied bank loans on their skincolour solely.
The answer was positive.

Does that mean that they were denied bank loans just based on their race?

Basically, yes.

On the outside there is also a lot of statistics involved and of course, if a black person is more likely to be poor or have a bad credit history, it's obvious that he will denied financial support more easily.

But there are statistic methods to phase out all the other aspects that are fair and the resulting correlation shows than what part race plays in the equation exactly.
And there appeared to be even with all the credit history and social background Black people are significantly more likely to have their application denied. I think that the auto loans are no different.

One thing that troubled me with the article is that the author dropped the ball when it comes to journalistic integrity. The guy representing the Consumer Group of course did not bring up whether or not there was any statistical difference in average credit score across race. Likewise, the representative of the Auto-Finance Group did not want to bring up this key defense so as not to appear racist. Instead he focused on consumer education.

Now at this point it is incumbent upon the journalist to find out if there are any differences in regard to credit rating across racial lines.

It took some digging but I found on page 52, footnote 100, in this Federal Trade Commission (FTC) Report on Credit-Based Insurance Scores that there is a difference.

* Blacks have an average credit score that is 10-35% worse than whites.
* Hispanics have an average credit score that is 5-25% worse than whites.
* Asians are about have about the same or slightly worse credit score than whites.

Studies in Missouri found that scores are correlated with racial, ethnic and income level of ZIP code even after controlling for marital status, education and housing values. Meanwhile a similar Virginia study made the claim that they could not come to the conclusion that either race or income is a predictor of a credit score.

The FTC did their own study and came up with the following results:
* The median White or Asian credit score is in the 54th and 52nd percentile. (This suggests a more even distribution.)
* The median African-American credit score is in the 23rd percentile. What this means is half of the Black population's credit score is in the lowest 25% of credit scores.
* The median Hispanic credit score is in the 32nd percentile. What this means is half of the Hispanic population's credit score falls within the lowest 33% of credit scores.

So the ugly truth that this article runs away from is that on average African-Americans have lower credit scores than Whites, Asians and Hispanics. Therefore, you would expect them to have loans approved at higher interest rates.

Now rather than getting all spun up over "racism" we need to be looking at the cultural, political and economic cycles that are keeping Blacks down.

At 5/13/09 06:10 AM, RubberTrucky wrote:

At 1/28/09 04:36 PM, Al6200 wrote:

At 1/28/09 09:20 AM, RubberTrucky wrote: This reminds me of my econometrics class this year. Even on the examinations we had to determine wether blacks are significantly denied bank loans on their skincolour solely.
The answer was positive.

Does that mean that they were denied bank loans just based on their race?

Basically, yes.

On the outside there is also a lot of statistics involved and of course, if a black person is more likely to be poor or have a bad credit history, it's obvious that he will denied financial support more easily.

But there are statistic methods to phase out all the other aspects that are fair and the resulting correlation shows than what part race plays in the equation exactly.
And there appeared to be even with all the credit history and social background Black people are significantly more likely to have their application denied. I think that the auto loans are no different.

But if you over-control you end up coming up with a spurious relationship such as when ice cream sales go up so does the crime rate. (HINT: hot weather correlates with both.)

To prove that race is a factor you need to look at it more deeply.

* Compare what interest rates are paid by the average African American and what is paid by the average White person by credit score. For example if race plays an issue than the average interest rate for a Black person in the top 10% of credit scores will be higher than for a White person with a top 10% credit score. Same thing with the bottom 25%.

Until then, I see nothing where race is anything but an indirect relationship to interest rates.

I still fail to see how race even factors. I have yet to meet a loan officer. As far as all the people I have ever gotten a loan from are concerned my skin could be purple. All they have ever seen is my credit score, income, payment history etc.... How does that relate to my race. And for the record I pay a higher rate because my credit sucks, not because I fooled them into thinking I was black.

At 5/20/07 10:04 PM, Dante-Son-Of-Sparda wrote:

exactly its about statistics and other things.

Wow, you sure sound likeyou know your stuff..

>_>