Banking while black: the same old story

Arizona State University once sent out testers to test for racial bias in hiring.  Some were black, some were white, some supposedly had criminal records, some did not.  Otherwise they were evenly matched.

Sure enough, the whites with criminal records had better acceptance than the blacks with clean records.

Rutgers Business School more recently sent out black and white testers to test for racial bias in small-business lending.  They were matched in every way except that the black applicants had slightly better qualifications than the white applicants.

Sure enough, the bank loan officers made the black applicants jump through a lot more hoops on average than the white applicants.

Among other things, the blacks were asked whether they were married, and whether their spouses were married, much more often than the white applicants.

They also on average had to provide more detailed financial information, got fewer offers of future appointments, got less offers of help in filling out forms and were thanked for coming in less frequently.

Despite all the very real progress since the civil rights struggles of the 1960s, African-Americans still do not compete on a level playing field.

LINKS

New Report Finds Racial Bias in Small Business Lending by Yusuf Ismail for Patch news in Newark, N.J.

Shaping Small-Business Lending Policy Through Matched-Pair Mystery Shoppers by Sterling A. Bone, Glenn L. Christensen, Jerome D. Williams, Stella Adams, Annalise Lederer and Paul C. Lubin for the Journal of Public Policy and Marketing.

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