Colour-coded lending?

[Eugene]

Credit providers to be checked for racism

Another effect of the National Credit Act on credit providers is that the National Credit Regulator plans to undertake a survey of loans that had been rejected and compare them with the credit bureaus’ ratings scores to see if there is a racial undertone in lending practices. This is according to Regulator Gabriel Davel, who says the third-biggest complaint to the regulator in the two months since the Act has been in force has been about the rejection of credit applications, according to the Mail & Guardian Online.

Although the Act requires the credit provider to give only the basic reason for rejecting the loan, for example stating lack of affordability, he has concerns that there is a racial bias when it comes to loans, particularly when done through branch managers. ‘This is true in more cases than we want to admit,’ says Davel. Advocate Ashina Singh of the Credit Bureau Association says it would be advisable for credit providers to provide more detailed reasons for refusal. ‘If you don’t provide a reason there is an inference of discrimination.’

Full Mail & Guardian Online report: http://www.mg.co.za/articlePage.aspx...nomy__business

[Dave A]

Reading the above, I couldn't help but wonder what the top 2 causes of calls were - answered in the article:

The number of calls to the regulator has soared from 5 000 to 20 000 since June. Davel says the two major areas of complaint received by the regulator refer to over-indebtedness and credit bureau inquiries.

He says the motor industry has generated the most complaints about indebtedness, followed by credit cards. Complaints about credit bureaus usually come from consumers who are unhappy about their credit records, or who are having problems trying to get certain inaccurate information removed.

As for "color-coding" - surely the formal credit industry is way past this by now, if they ever color-coded in the first place.

[Eugene]

I agree with Dave. Seems that the credit providers are reluctant to give reasons why they refuse credit and the old racist issue keeps popping up as one of the "apparant" reasons. My feeling (based on vast amounts of legal work that I do in the credit industry) is also that we have moved on and that colour should make no impact on your ability to entertain your debts - that's now if a proper credit assessment was done.