Posted on 08/13/2021 6:42:28 AM PDT by Kaslin
If you ask 10 different people what online banking means to them, don’t be surprised if you get 10 different responses. But in the minority community, there’s a very special meaning.
Opportunity.
Among some minorities, you may hear online banking called a “second chance,” “lifeline” or even “entry into the real world.” In the black community, which has often been left behind by the “brick and mortar” banks, partnering with online lenders and “cyber banks” have given them a seat at the table they never had in the past.
One only need look at the checkered history that the bank “around the corner” has had in minority communities.
Multiple lawsuits have been filed against institutions such as M&T Bank, Countrywide Financial, Sun Trust and Wells Fargo, rooted in allegations of racial bias and inferior banking products to even the most qualified minority applicants.
Studies from consultancies such as McKinsey & Co, meanwhile, have found that there are fewer branches in minority neighborhoods.
Black mortgage denial rates hover above 20% in cities such as St Louis, Missouri, Tampa, Florida, New York City and Detroit by conventional banks – according to a 2016 study by the online realtor Zillow – making the dream of home ownership even more difficult for these families.
These and many other reasons have all but pushed the black community into online financial options.
As an online banking customer, I can say without hesitation that I prefer the options of my bank-without-branches exponentially more than previous relationships with establishment banks. I began online banking while challenging overdraft fees with one such big bank. It caused a checking account to close with a negative balance, disqualifying me from having an account after a cursory check through the ChexSystems reporting service. I now am a happy online customer, with no need to return to a major bank.
But we now face an interesting dilemma in which the Biden Administration, while giving the perception of supporting minority issues on one hand, is flirting with the idea of curtailing digital lending and similar financial services with the other. They claim this is a laudable goal of protecting consumers from the “predatory” tactics of online lenders.
It’s alleged that borrowers, especially minorities, are trapped in debt cycles after entering into loans with higher than typical interest rates. While some states have maximum APR borrowing rates, digital lenders may circumvent those caps by forging a partnership with federally regulated financial institutions not obliged to comply with state regulations.
What goes unmentioned is the harm done by this paternalism. Many credit reporting systems disproportionately list persons of color as credit risks. This closes lending options to them. Online lenders are more than willing to take a chance on such a loan for a person or small business. Do not mistake this as taking advantage. As with any financial institution, online lenders have a fiduciary obligation to explain the terms of all loans they dispense and explain all options – including repercussions – should those obligations not be met as agreed upon.
Studies have shown that, in using conventional lending options, blacks are 80 percent more likely to be denied a home mortgage and 47 percent more likely to have a business loan denied or be underfunded. Online lenders have truly been a lifeline to those communities whose options have been minimized.
I recently had a conversation with a lifelong friend who is a banking industry executive. I asked him how he felt about online competition, and if he thought the government was needed to scale back his cyber-world competition. He cited his ability to present his products without any “help” from the government. Perhaps the White House and advocates of this reckless strategy should listen to him.
We are a free-market economy, yet the government wants to once again pick winners and losers. It’s not something it has ever done very well.
Government going to war with online banking runs the risk of hurting minority communities. We must, in the most deliberate terms, reject any potential restrictions supposedly in the interests of black opportunity and prosperity.
the banks are the governments secret police..
As long as check cashing places and payday loans are around, blacks won’t mind.
You (black Americans) get the government you voted for, even if the government was hijacked in the 2020 elections.
Don’t borrow money and don’t go into debt
“We are a free-market economy”
Not anymore.
Somehow the credit score companies like Experian are able to figure out the color of a persons skin without ever seeing them? Amazing.
Make it harder for black Americans to work (vaccine requirements), make it harder for them to bank...
Gee, it’s almost like the Democrat don’t really like them
“...Somehow the credit score companies like Experian are able to figure out the color of a persons skin without ever seeing them? ...”
Special characters in the first name.
Yeah, I went there. But it’s okay, cuz I’m black ...lol.
Seriously, I probably need sensitivity training.
jimjohn
I got three paragraphs in then started scanning then quit.
This is someone looking for a problem and making a force fit of racism.
God please make this stop.
Have you ever had to verify your identity online? I had to recently. The some of the security questions were people and addresses, even employers, from as much as 20 years ago - and they were instant, answer one, the next one comes up. We have no secrets.
Credit card loan sharks at 15, 20, 30%
They get their money practically free from the feds.
Well, no chit, Sherlock. Maybe it's because they fear getting firebombed by BLM and Antifa type people during a "mostly peaceful demonstration" if they locate in these neighborhoods.
Black mortgage denial rates hover above 20% in cities such as St Louis, Missouri, Tampa, Florida, New York City and Detroit by conventional banks
A meaningless number unless denial rates for whites with similar credit histories have lower denial rates.
I agree, there are no secrets. However, I highly doubt the color of one’s skin is in those regression equations that Experian and the other credit companies use. If it were the liberals would be screaming to high heaven.
The credit companies don’t need to use skin color. All they need to use is bill payment history.
Hmmmm....smells like.....SYSTEMIC RACISM!!!!!
Yeah, I picked up on that as well.
“I asked the band for a $750,000 loan to buy a house and was denied because I’m not white.”
Never mind the spotty job history, prior loan defaults, average annual income of $35,000, and credit score in the mid-400s. No...it was denied because you’re not white.
When we have watched black “communities” burn and loot everything around them I don’t think that is helping their cause. Add to that the habit of “activists” calling every single thing racist in an attempt to shake down businesses who would want to do business with American blacks?
Maybe the band did not have $750,000 to spare.
Doh! Uh...bank, I meant bank. LOL, nice catch.
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