The accuracy of credit reports for individuals in American society has been under attack for years. TRW, the largest credit reporting agency, has been sued for faulty credit reporting. Both TRW and Trans Union have been charged with another violation of the privacy of credit information on individuals because the credit reporting agencies have been selling mailing lists based on individual credit dossiers. Changes have been leveled at banks and bankers for decades in relation to the extension of mortgage, business, and community development credit to members of minority population groups and to residents of neighborhoods and communities with predominantly minority group populations. The discriminatory and unethical practice of which banking and bankers are accused is known as redlining. Many bankers and some economists, however, contend that banking is being criticized unfairly, and that loan denials to minorities are neither discriminatory nor unethical. Similarly, TRW and the other credit reporting agencies contend that they have done nothing illegal or unethical.
This research examines the issues of inaccuracy and unfairness in credit reporting and extension. This examination also reviews legislative initiatives designed to correct these problems.
Bias in lending on the basis of race and ethnic background has an extensive history--both actual and perceived--in the United States. Such bias is charged and investigated most frequently in relation to home mortgages; however, bias in the extension of business loans has also constituted a significant problem in American society over the decades. Discrimination in the extension of credit is volatile issue in the United States. Although federal government efforts to end such discrimination have been pursued for two decades, critics contend that much work is still required.
Discrimination in lending is a part of the larger problem of ...