Bill Overview
Title: Preventing Racial Profiling in Lending Act
Description: This bill prohibits a federal agency from requiring any person or entity to estimate a borrower's race or ethnicity through visual observation or surname when extending credit.
Sponsors: Rep. Williams, Roger [R-TX-25]
Target Audience
Population: People applying for credit or loans
Estimated Size: 150000000
- The bill affects the process and criteria by which borrowers' information is collected during lending.
- Individuals who apply for loans may be implicated, as the measures in question pertain to borrower information collection.
- Racial profiling in lending extends beyond a specific racial group, potentially affecting minority consumers most directly.
- The global population impacted includes all people who are part of a demographic where racial identification could influence their lending outcome.
Reasoning
- The Preventing Racial Profiling in Lending Act directly targets specific practices that can influence the lending process, especially for minority groups who might face discrimination based on visual race or surname recognition.
- The budgetary constraints suggest a focus on systemic changes in the lending process rather than individual compensation or outreach, indicating efforts in modifying banking protocols, training lenders, or instigating legal compliance programs.
- Considering the policy's target on loan applicants, there's an imperative to include individuals across different demographics affected by lending decisions.
- The commonness of experiences varies, but all simulated individuals should represent facets of the US demographic landscape susceptible to racial profiling in lending contexts, such as homeowners, small business owners, and students applying for federal loans.
- The anticipated wellbeing improvement from not seeing their race visually estimated can vary from low to high among minorities due to expected reductions in discrimination.
Simulated Interviews
Small Business Owner (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- I often fear that my ethnicity impacts my loan applications negatively.
- It's great that this policy finally realizes what many minorities face.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Software Engineer (Los Angeles, CA)
Age: 32 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- I think it'll help make the lending process fairer.
- Reducing bias should improve my future borrowing experiences.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 3 |
| Year 20 | 7 | 3 |
Nurse (Chicago, IL)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- I hope it leads to fairness when I apply for my student loan.
- I don't want my ethnicity to affect the interest rate I get.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 9 | 3 |
Teacher (Miami, FL)
Age: 41 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- My last loan came with a surprisingly high interest rate; I believe this policy could prevent that.
- I support any initiative that encourages equitable treatment in lending.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
Real Estate Agent (Houston, TX)
Age: 38 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- I haven't faced discrimination personally, but I see how it can affect others.
- Awareness on this issue is overdue.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Corporate Lawyer (Seattle, WA)
Age: 50 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I appreciate any policy that tries to remove biases from lending, though it might not directly affect me.
- It will require lenders to change assessment approaches.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Freelancer (San Francisco, CA)
Age: 27 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I'm hopeful this policy encourages more transparent lending practices.
- Digital lending platforms sometimes feel inaccessible.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 5 |
Retired (Atlanta, GA)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 4/20
Statement of Opinion:
- In my lifetime, I've seen the way loans are not equally accessible.
- The policy could protect future generations from similar experiences.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 4 |
College Student (Boston, MA)
Age: 22 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- Ensuring my ethnicity isn’t a barrier to scholarships or loans is critical.
- The act seems progressive and necessary for students like me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 9 | 4 |
Nurse Practitioner (Phoenix, AZ)
Age: 30 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- Historically, accessing fair loans has been a challenge for me and my community.
- This policy could equalize the playing field in the future.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 8 | 4 |
| Year 5 | 8 | 3 |
| Year 10 | 9 | 3 |
| Year 20 | 9 | 2 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $3500000 (Low: $1500000, High: $6000000)
Year 3: $3500000 (Low: $1500000, High: $6000000)
Year 5: $3000000 (Low: $1000000, High: $5000000)
Year 10: $2000000 (Low: $500000, High: $4000000)
Year 100: $1000000 (Low: $100000, High: $2000000)
Key Considerations
- Changing procedures and systems at financial institutions might incur initial costs linked to the policy.
- There could be benefits related to social equity and economic fairness, which might offset initial costs in the long term.
- Public perception and social acceptance of the policy could influence its efficacy and compliance.