Strike 1: African Americans disproportionately (54%) have lower, poor, or no credit score. Probably don't need to say anymore about that because we all know America is "not there yet" on racial equality. RBL is a step backward in time on that problem.
Strike 2: One in five Americans (@ 20%) are penalized with higher loan rates or out right loan denials because they have no credit history. Young Americans, such as recent high school and college graduates just starting out in life, are the most harmed. These young people are considered by risk-based lenders to be "guilty (and penalized) until proven innocent", not exactly in line with our American approach to justice - which is, last time I checked, "innocent until proven guilty".
Strike 3: A recent national, independent survey found that over one-third (34%) of Americans' credit reports contained erroneous data. And, even more outrageous, the burden (time and costs) of correcting the errors falls on the American consumer - you and me.
* Source: CNBC News (2022)
... to err is human, to "Do the Right Thing" is divine.
Let's hope the SECU Board will step back up to the plate!
1) That’s just a racist statement. That’s equivalent to saying minorities don’t pay their bills, which is untrue.
ReplyDelete2) SECU lends to everyone, even those without scores. Not having a credit history to show whether you pay debt as agreed is a higher risk.
3)A national poll means nothing. Ask anyone with a missed payment on their credit report and they will say either the debt isn’t theirs or the missed payment is a mistake.
1 - It is not a racist statement and neither does it assume minorities don't pay their bills. What it does say is the manner in which minorities are rated by the credit reporting agencies is prejudicial. For example if you happen to live in a neighborhood where the only place to borrow money is a finance company even if you pay perfectly your score will be lower than a person in another neighborhood who borrows from Citibank and pays perfectly.
Delete2 - Again, disagree with your premise. Members with no credit score should not be judged guilty until proven innocent. All new borrowers deserve an equal opportunity.
3 - Now you're just being prejudiced yourself. making assumptions of facts not in evidence.
Wanna try again?
What an unusual personality!
Delete1)"Minorities" do pay their bills, which is why they shouldn't be "profiled" and penalized by higher rates with risk-based lending. That's called discrimination - unjust and unfair to real people.
2) SECU overcharges over 50% of SECU members with risk-based lending. Believe you'll find the majority of SECU members wish that abhorrent practice would stop. Why do you think discrimination against anyone is fair?
3)National polls and factual data "mean nothing" to people with a closed mind, or those with unusual personalities.
The quotes are from a CNBC documentary...I didn't make them up.
If you’re referring to race, you should use black. Not all black people identify as African American. Also, wow what a racist statement that black people don’t pay debts as agreed.
ReplyDeleteSame "unusual" personality at work here again.
DeleteBlack people - and folks of all shades and all social levels - do pay their debts as SECU proved over 85 years of lending under the fair "same rate for all". Now SECU overcharges over 50% of members - of all shades/social level - with risk-based lending.
But, let's not argue; let's just agree you like to overcharge folks who can't defend themselves and move on.OK?
It's just a personality thing...I feel your pain!
According to investopedia, all races have average scores that fall into the good range.
ReplyDeleteAverage FICO Score by Race
Race 2019 Average Score Classification
Black 677 Good
Hispanic 701 Good
Other 732 Good
White 734 Good
Asian 745 Very Good
Source: Shift Credit Card Processing, August 2021, reporting U.S. Federal Reserve data
Black 677
DeleteWhite 734
67 points higher. No racism or “white privilege” involved. Remind me which one is “A Paper”?
Neither is a-paper.
DeleteThe SECU RBL "A-paper" tier is 720 and above.
DeleteBlack SECU members (average credit score 677) have therefore now been designated as second class "B-paper" (below 720) members and find themselves being charged higher loan rates.
All SECU members in the past had a great track record of repaying their loans (with consistent, year after year low loan losses).
What has changed at SECU?... where/who is the problem?
Credit scores do not take into account any demographic information. They only take into account what is reported on a credit record. They simply represent the likelihood of a borrower repaying a debt as agreed.
DeleteStill believe in Santa, the tooth fairy and the Easter bunny too?
DeleteBut we have DEI .............
ReplyDelete"to err is human, to "Do the Right Thing" is divine."
ReplyDeletethis is a GREAT Line .... I'm stealing it (hmmm that doesn't sound right)... borrowing .... I'm borrowing it .... ;). Is there a fee? I'm retired so I might not be A paper (after working almost 50 years btw)
In his poem "An Essay on Criticism" (Part II , 1711). Alexander Pope explains that, while anyone can make a mistake, we should aspire to do as God does, that is, show mercy and forgive sinners:
Delete" To err is human, Ah ne'er so dire a Thirst of Glory boast,
Nor in the Critic let the Man be lost!
Good-Nature and Good-Sense must ever join;
To err is Human; to Forgive, Divine."
SECU succeeded greatly for 85 years by being willing to listen to members' struggles and by being willing to show mercy and forgiveness - good naturedly! ... based on common sense.
That business model - "Do the Right Thing" - worked! To the benefit of all members..
Past performance is no guarantee of future results. They should slap that warning on everything.
DeleteAt 6:32AM - Especially credit scores which even the credit bureaus readily admit can't predict the future performance of any individual borrower. Thanks for making that point!
DeleteIf a data source suggests blacks have lower, poor or no credit score there could be a few reasons why:
ReplyDelete1) the data analysis has a racist bend, as the commenters suggest.
2) the data is simply misread and the analysis is plain wrong.
3) the algorithm used by the credit bureaus in annointing the credit score as a true predictor is FLAWED.
Why "race" based lending isn't solely racist...
ReplyDeletehttps://schs.dph.ncdhhs.gov/data/vital/volume1/2020/Volume1-2020.pdf
Page 31
2020 total NC adult deaths = 116,755
Wonder how many living spouses missed a payment? How dare they marry someone who died on them?
SECU will become the next Blockbuster unless these Non-A-Paper "risky" individuals, who clearly make bad choices, pay a higher rate.
sEcU WiLl bEcOmE tHe NeXt BLoCkBuSTer🤪 Been working for 85+ years and now it sucks when they try to reinvent the wheel the last 2 years. Nothing more than cronie capitalism. Stealing money from the weak and poor and giving to thyself while the mid level managers and vps defend this crap because they have no backbone. rBl Is tHe fUtUrE🤪 meanwhile workers across the country hate working at every credit union and bank, but secu has had HIGH employee morale for years andu think it’s best to bend over to become industry standard? Ask employees at allegacy how they like their job. Hint: you won’t like the response bootlicker, but hey if you like industry standard, get your a** outta SECU!!!
DeleteIt seems like the banks and credit unions that have adopted RBL have closed? Don’t see the logic in this statement?
DeleteIf you want industry standard working conditions, just leave SECU. I’m trying to enjoy my years at SECU while not being micromanaged to the tenth degree. Leave the industry standard for failing institutions that use the RBL model. Leave the greatness and uniqueness to SECU.
DeleteWe are not dumb and don’t buy into the RBL propaganda as employees.
DeleteNot sure why everyone didn’t pick up what you were putting down here @9:02. But life happens when you least expect it. Doesn’t mean they aren’t going to repay their loans in the future,
DeleteMaybe not so hard on 9:02 PM...think it was tongue in cheek.
ReplyDeleteIf Industry Standard was so great, why do banks need bailed out ? The insiders are pillaging the people ...
ReplyDelete