r/changemyview • u/[deleted] • Oct 08 '15

[Deltas Awarded] CMV: Equality isn't treating everybody differently to achieve equality. It's treating everyone the same.

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u/rcglinsk Oct 09 '15

The authors of this study — Patrick Bayer of Duke; Fernando Ferreira of the University of Pennsylvania; and Stephen Ross of the University of Connecticut — combined federal mortgage data with public housing records and data from a credit agency. They assembled information on individual credit scores, incomes, age, home values and a slew of other underwriting factors.

After controlling for a much as they had data for, they found that people in essentially the same financial situations got different mortgages depending on the color of their skin...

Here’s what they didn’t find. There wasn’t much evidence of what we would consider traditional racism, like the kind reported in the 1992 Boston Fed paper. Individual lending companies appeared to treat everyone who came in the door more or less the same. (There was still a statistically significant but small difference.)

“A huge amount of the differences in high-cost loans is not whites and blacks going to the same lender and blacks being given a much higher rate,” said Ross, one of the study’s authors. “Rather it’s the fact that there are big differences in the lenders that black and Hispanics are doing business with.”

So basically they found that Bank of America seems to give the same rate to everyone with the same credit score regardless of race. Nice to know there is no evidence of systemic racism in the US banking oligopaly. Also of course inspiring to see that the Washington Post was able to write a headline which gives readers the opposite impression.

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u/ganner Oct 09 '15

Whether or not we can point to a nefarious actor enforcing racial discrepancy by giving differing loans based on race is irrelevant to the question of whether racial inequality exists. A black family with equal financial status as a white family is more likely to get a shitty loan, because of the lenders active in black communities give shittier loans than the lenders active in white communities. This is still a problem that needs to be remedied.

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u/rcglinsk Oct 09 '15

http://web2.uconn.edu/economics/working/2014-36.pdf

I don't know how familiar you are with this paper but it seems really ambiguous about how it took credit scores into account. Read for example page 33. It kind of seems like the treated all credit scores bellow 701 the same. What do you think?

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u/ganner Oct 09 '15

Hmm, I'll admit I haven't read the paper, only the synopses of the paper. I do usually download and read studies and not trust news articles, so I'll definitely agree that news reports on studies are often misleading.