4 ms·
I didn't advocate creating any laws. I was simply describing a concept that goes beyond congress. However, lets roll with your thought experiment. Lets conside
by yummyfajitas 10y ago
I didn't advocate creating any laws. I was simply describing a concept that goes beyond congress.
However, lets roll with your thought experiment. Lets consider a variation of "equal rights" that applies to more than just the government - say it also applied to lending. It would require 2 extra draconian laws:
1) A law to force private entities to associate with people they dislike, even if that association causes to lose money.
2) A law to force some borrowers to pay higher interest rates to subsidize the defaults of others.
Actually these draconian laws exist and are not particularly controversial at all (though they certainly were in the past). I'm curious to know what you think about it.
- nommm-nommm 10y agoWhich laws are those?
- yummyfajitas 10y agoECOA and FHA act, among others. https://en.wikipedia.org/wiki/Equal_Credit_Opportunity_Act https://en.wikipedia.org/wiki/Equal_Credit_Opportunity_Act https://en.wikipedia.org/wiki/Fair_Housing_Act https://en.wikipedia.org/wiki/Fair_Housing_Act Surrounding these laws is a bunch of regulation and agency interpretation - i.e. if an agency doesn't like your lending/free association choices they'll hit you with lawsuits/regulatory actions that are themselves very punishing. As a concrete example, see Figure 7 of this paper. This figure shows that lenders could avoid a lot of defaults if they did per-race isotonic regression on FICO scores. In non-technical terms, this means a black person with a FICO score of 600 is more likely to default than an Asian person with the same score, and this information is easy to use. However, lenders are legally forbidden from using this information; as a result, lenders must associate with people (potential defaulters) that they don't want to and Asian people must pay higher interest rates because of this. https://drive.google.com/file/d/0B-wQVEjH9yuhanpyQjUwQS1JOTQ/view https://drive.google.com/file/d/0B-wQVEjH9yuhanpyQjUwQS1JOTQ...