Policies That Foster Fair Lending to Us Minority Groups
Lending discrimination is any action that prevents an individual’s access to a loan product because of their race, color, nationality, gender, disability, family status, or other reasons. Any factors other than the borrower’s creditworthiness influencing the lender against approving a loan request are considered unfair. Black families have been deprived of the right to take mortgage loans for decades. Other minorities also fell victims to biased treatment from lenders. Fair lending policies are stipulated under the Equal Credit Opportunity Act and Fair Housing Act.
Payday lending is one of the most accessible means for an eligible candidate to get emergency cash. Direct lenders providing short-term loans have a clean record in terms of discrimination. To them, an applicant’s source of income is one of the most important criteria for approval, along with the general requirements that apply to all by default. Racial discrimination is not an issue with these lenders, especially since many customers apply online without even meeting the loan provider face to face. A law-abiding clerk will comply with fair lending practices across all stages of verification. For instance, loan providers may contact an applicant’s employer to verify their employment status. If the manager expresses any discriminatory comments after having confirmed the applicant’s connection to their organization, the lender is to disregard them. Whether they choose to point out or report discriminatory comments is a matter of personal choice.
Due to the low chance of being discriminated against in any way, shape, or form when applying for a payday loan, the industry records some of the highest numbers of minority groups among their customers. Official reports confirm payday lending businesses’ compliance with fair lending policies and anti-discriminatory laws.
Financial institutions are to follow the instructions from the Federal Bank Regulatory Agencies. Currently, it includes but is not limited to regulators such as the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Internal Revenue Services (IRS), the Federal Trade Commission (FTC). Each of them has additional specifications that must be followed. No federal institution will tolerate or encourage discriminatory actions during a lending transaction. Should you have any doubts about your fair treatment as a customer, feel free to seek help with your local CFPB or other responsible entities.