Takin’ aim

This morning, I stumbled on an article on the Bloomburg website about the Consumer Financial Protection Bureau (CFPB) sanctioning certain banks for vehicle loans and loan interest rate increases by the auto dealer that appear discriminatory.

Dealers often provide financing by giving buyers loans backed by banks and other lenders, a process known as indirect lending…buyers receive a loan that is costlier than the one the bank gave the dealer.

One particular part of the article jumped out at me:

CFPB has the power to enforce Equal Credit Opportunity Act, the 1974 law banning discrimination in lending. Last year, the agency indicated it would apply a legal doctrine known as disparate impact to consumer financial products. The doctrine states that lenders can be sanctioned for actions that have a discriminatory effect — as demonstrated by statistical analysis, for example — even if they didn’t intend to discriminate. “From the perspective of a consumer disadvantaged by policies that have a discriminatory effect, it makes no practical difference whether a lender consciously intended to discriminate,” Cordray said in a speech yesterday to the CFPB’s Consumer Advisory Board. “Every consumer, regardless of race, gender or other characteristics protected by federal law, should have equal access to credit.”

Fees collected by auto dealers “have historically been found to affect people of color more than others,” said Vahey, the CFPB spokeswoman.

The thing is, not only do fees affect people of color more than other, they affect low-income people more than others, no matter the color. Some research even suggests that they prey on low-income people. I wonder, then: Could one could even say that ‘fees collected by auto dealers are found to affect poor people more than others?’

By posing this question, I don’t mean to deny or discount the racial privilege and disadvantage that exists. I also believe, however, that people in poverty are discriminated against, no matter their race. I think there is a gap in public dialogue and consciousness about a prejudice against people in poverty.  Impoverished people can be easily discounted and when that’s brought up in debate or conversation, it can be discounted by saying “They don’t have to be poor/Get a job/Some variation thereof.”

What do you think about this? Am I way off the mark about people in poverty being discriminated against?

This will not be the last you hear from me about lending practices.  Stay tuned.

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