Bill Overview
Title: Examining Educational Redlining in Lending Act
Description: This bill requires the Consumer Financial Protection Bureau to annually assess and report on the use of educational data in determining a consumer's creditworthiness by an individual offering a consumer financial product or service.
Sponsors: Rep. Beatty, Joyce [D-OH-3]
Target Audience
Population: Individuals applying for consumer financial products or services
Estimated Size: 211000000
- The bill focuses on the use of educational data in creditworthiness assessments.
- Individuals who apply for consumer financial products or services may be impacted.
- Educational redlining potentially affects anyone whose educational background is used in financial decisions.
- Globally, the lending market impacts individuals seeking credit or financial services.
- Many countries use educational data in assessing creditworthiness, thus impacting a global population.
Reasoning
- In evaluating the impact of this policy, it is important to consider diverse cases such as individuals with various educational backgrounds, different levels of reliance on credit systems, and distinct financial profiles.
- Budget constraints limit the extent of direct interventions, but the policy primarily aims at transparency and fairness, potentially affecting those concerned with credit evaluation standards.
- Direct impact may vary with the degree to which educational background currently influences an individual's access to financial products.
Simulated Interviews
Data Analyst (New York City, NY)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I believe that my educational background usually gives me an advantage when applying for financial products.
- However, it seems unfair for creditworthiness to be linked too closely to education alone.
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 | 7 |
| Year 20 | 8 | 7 |
Small Business Owner (Austin, TX)
Age: 35 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- Sometimes it feels as if not having a degree affects my ability to get good loan terms.
- This policy could help make things fairer for people like me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Teacher (Atlanta, GA)
Age: 42 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 7/20
Statement of Opinion:
- My student loan debt seems to weigh heavily against me when I need credit.
- If this policy could lessen that impact, I'd feel more hopeful about my financial future.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Farmer (Rural Alabama)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 4/20
Statement of Opinion:
- I rarely think about my education when dealing with banks.
- If anything, less emphasis on education may simplify credit evaluations.
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 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Software Engineer (San Francisco, CA)
Age: 30 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- I've been fortunate with my financial profile, and education has probably helped.
- I support initiatives that make these opportunities more equitable.
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 |
Retired (Chicago, IL)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 3/20
Statement of Opinion:
- Credit evaluations for me are more about my financial history than my education.
- This policy might not change much for me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Freelance Writer (Miami, FL)
Age: 27 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- Sometimes it feels like student loans are a barrier to better financial products.
- Hoping this policy prompts fairer treatment in credit assessments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Entrepreneur (Seattle, WA)
Age: 25 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- I opted out of traditional education, which shouldn't hold me back financially.
- This policy could push banks to evaluate me more on my merits than my education.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Real Estate Agent (Los Angeles, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I like the idea of making credit evaluation less about education and more about capability.
- Not sure how quickly this policy will lead to change.
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 | 7 |
| Year 20 | 8 | 7 |
Nurse (Phoenix, AZ)
Age: 33 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- Even with a solid degree, there's a concern about how education data is utilized in credit decisions.
- This policy could help secure fair practices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $3000000 (Low: $2000000, High: $4000000)
Year 2: $2500000 (Low: $2000000, High: $3000000)
Year 3: $2500000 (Low: $2000000, High: $3000000)
Year 5: $2500000 (Low: $2000000, High: $3000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The bill can increase transparency in the lending industry regarding the use of educational data.
- Effective implementation may rely on the CFPB's ability to coordinate with other data-holding entities.
- Potential impacts on lending practices and credit access are unknown but important to consider.