5 ms·

I get all of that, but it in no way explains the question that I asked. How do the terrible atrocities of the past cause auto lenders of today to deny minoriti

I get all of that, but it in no way explains the question that I asked. How do the terrible atrocities of the past cause auto lenders of today to deny minorities loans based on racism alone and not business sense? That is my question and that is what this post is about. TFA has evidence that people are going out of their way now to deny car loans to people that would otherwise be eligible for those loans except for their race. I am not doubting that this is happening, I am trying to determine why it would be and how no start-up has recognized the "market inefficiency" and opened a "we specialize in loans to black and hispanic people" and made billions and billions of free dollars currently being neglected.

toufiqbarhamov 8y ago
I see, well I still think that I can help here. How do the terrible atrocities of the past cause auto lenders of today to deny minorities loans based on racism alone and not business sense? Because attitudes take time to change, and if we didn’t know that before the resurgence of facism in places like Brazil, Italy, Austria, Hungary and other countries should reach us that. The same people who thought it was acceptable to redline, or even kill people over their race still do, they’ve just changed their language. Some of their children doubtless feel differently, others almost certainly inherent their attitudes from their parents and communities. The older generation with its concentration of wealth and influence also haven’t changed. As another person said, people are not rational.
- mhuffman 8y ago
  I understand, and agree with the "stickiness" of both racism and poverty, but like I mentioned above, home loans are one thing because maybe those racist people thought that "the blacks" where going to bring down their property values or make eyes at their daughters if they lived in the neighborhood. So even though it was terrible and misguided, it was rational from their warped perspective. But car loans? In 2019? It is just so baffling to me. Both why they would do it, and also why no one else at all is stepping up to get that money.
  - joejerryronnie 8y ago
    Two things can be equally true - systemic racial bias is a thing and has wide-ranging effects, and it doesn’t really make sense to discriminate on issuing auto loans in 2019. I mean, regardless of your personal feelings toward someone, you’re just losing out on commission if you deny the loan. Also, it probably doesn’t matter if you think they can pay the loan back as it will just get packaged and sold several times to other institutions. There are probably other factors which weigh in more heavily than the loan processor’s person biases, e.g. the credit score system, minorities may be less willing to challenge the initial rate offered, people perhaps negotiating from a weaker position if they don’t have multiple credit options available (bank, credit union, heloc), etc.
perfmode 8y ago
Bias doesn’t have to be conscious. And the market doesn’t have to be efficient. Efficient markets aren’t inherent.
gammateam 8y ago
> I am trying to determine why it would be and how no start-up has recognized the "market inefficiency" and opened a "we specialize in loans to black and hispanic people" and made billions and billions of free dollars currently being neglected. Because money service licenses are expensive and require capital from the same group that would balk at this business plan Secondly auto loan commissions are GREAT, the pie from people who arent getting denied is still large enough to make enough free dollars Third, minorities that are denied still have a variety of institution to go to that will more likely lend, such as credit unions who will lend on more favorable terms anyway (so your startup MAY exist?). We dont have data on the whole lifecycle of peoples user experience. Sorry that people were so distracted by your question that you couldnt get an answer.
- mhuffman 8y ago
  Thanks, those are reasonable theories. I think the third one seems most likely to answer my question ... minorities are actually getting the loans that they are qualified for, but have to apply more times than an equally qualified white person due to racism. It is still baffling to me that a bank officer, or car dealership salesperson would purposely decrease their own income, forgo their own bonuses, and risk the ire of their supervisors and investors to purposely not give a loan to a black or hispanic person ... all with no "rational" reason, even a warped rational reason, they just would do it because ... well no reason! This would have to show up to the management during analytics. I know plenty of racist people in the south, but none of them would risk their livelihoods or income just to be racist, they would just shut the hell up, "take it", then bitch about it back at home or around their friends while getting drunk. And then I think of large corporations that are literally willing to fuck over babies, children, women, hell the whole planet, for money, and to think that they would be willing to lose money to be racist is hard to square. I guess I have an impression that greed is a bigger driver in people's lives than racism ... but perhaps not, we do have this data (which I haven't seen the raw data, but don't doubt it) that seems to indicate otherwise. The irony of it all is that if these people really do hate minorities, there is no legal way to have more power over them, or to fuck them over, I guess, then to keep them in debt!
  - 8y ago

toufiqbarhamov 8y ago

I see, well I still think that I can help here. How do the terrible atrocities of the past cause auto lenders of today to deny minorities loans based on racism alone and not business sense? Because attitudes take time to change, and if we didn’t know that before the resurgence of facism in places like Brazil, Italy, Austria, Hungary and other countries should reach us that. The same people who thought it was acceptable to redline, or even kill people over their race still do, they’ve just changed their language. Some of their children doubtless feel differently, others almost certainly inherent their attitudes from their parents and communities. The older generation with its concentration of wealth and influence also haven’t changed. As another person said, people are not rational.

mhuffman 8y ago
I understand, and agree with the "stickiness" of both racism and poverty, but like I mentioned above, home loans are one thing because maybe those racist people thought that "the blacks" where going to bring down their property values or make eyes at their daughters if they lived in the neighborhood. So even though it was terrible and misguided, it was rational from their warped perspective. But car loans? In 2019? It is just so baffling to me. Both why they would do it, and also why no one else at all is stepping up to get that money.
- joejerryronnie 8y ago
  Two things can be equally true - systemic racial bias is a thing and has wide-ranging effects, and it doesn’t really make sense to discriminate on issuing auto loans in 2019. I mean, regardless of your personal feelings toward someone, you’re just losing out on commission if you deny the loan. Also, it probably doesn’t matter if you think they can pay the loan back as it will just get packaged and sold several times to other institutions. There are probably other factors which weigh in more heavily than the loan processor’s person biases, e.g. the credit score system, minorities may be less willing to challenge the initial rate offered, people perhaps negotiating from a weaker position if they don’t have multiple credit options available (bank, credit union, heloc), etc.

perfmode 8y ago

Bias doesn’t have to be conscious. And the market doesn’t have to be efficient. Efficient markets aren’t inherent.

gammateam 8y ago

> I am trying to determine why it would be and how no start-up has recognized the "market inefficiency" and opened a "we specialize in loans to black and hispanic people" and made billions and billions of free dollars currently being neglected. Because money service licenses are expensive and require capital from the same group that would balk at this business plan Secondly auto loan commissions are GREAT, the pie from people who arent getting denied is still large enough to make enough free dollars Third, minorities that are denied still have a variety of institution to go to that will more likely lend, such as credit unions who will lend on more favorable terms anyway (so your startup MAY exist?). We dont have data on the whole lifecycle of peoples user experience. Sorry that people were so distracted by your question that you couldnt get an answer.

mhuffman 8y ago
Thanks, those are reasonable theories. I think the third one seems most likely to answer my question ... minorities are actually getting the loans that they are qualified for, but have to apply more times than an equally qualified white person due to racism. It is still baffling to me that a bank officer, or car dealership salesperson would purposely decrease their own income, forgo their own bonuses, and risk the ire of their supervisors and investors to purposely not give a loan to a black or hispanic person ... all with no "rational" reason, even a warped rational reason, they just would do it because ... well no reason! This would have to show up to the management during analytics. I know plenty of racist people in the south, but none of them would risk their livelihoods or income just to be racist, they would just shut the hell up, "take it", then bitch about it back at home or around their friends while getting drunk. And then I think of large corporations that are literally willing to fuck over babies, children, women, hell the whole planet, for money, and to think that they would be willing to lose money to be racist is hard to square. I guess I have an impression that greed is a bigger driver in people's lives than racism ... but perhaps not, we do have this data (which I haven't seen the raw data, but don't doubt it) that seems to indicate otherwise. The irony of it all is that if these people really do hate minorities, there is no legal way to have more power over them, or to fuck them over, I guess, then to keep them in debt!
- 8y ago