Dinesh D'Souza
Michael Godin Arlotto (154aamga@pic.ucla.edu)
Fri, 01 Dec 95 15:52:12 -0800
D'Souza states in his argument that if banks reject blacks unfairly, then the
black default rate should be lower (their equal). His argument states that if
banks were going to descriminate by giving as few loans to blacks as possible,
then they would only allow the very top black candidates to recieve loans. By
doing this they can maintain their prejudices and make a buck. So the banks
would reject any black applicant if he had even the slightest wrinkle in his
credit history. So he concludes that one would expect the black default rate
to be lower if blacks are being descriminated against. There are several
questions regarding his reasoning. The banks could be descriminating by
detering blacks from applying by telling them they wouldn't qualify for a loan
and shouldn't bother with an application. Also, perhaps the banks are
descriminating based on other ideas other than just income and credit history.
If this were the case, then blacks of all income levels would be rejected.
This could explain why the default rates were equal.
I think the best way to resolve this contraversy would be to determine the
average income and credit ratings of whites and blacks that are approved and
denied for loans. Then compare these figures to see who is write and if
intervention is required.
Tell me whacha think,
Mike
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