[thechat] Hiding from Elections Now

Martin Burns martin at easyweb.co.uk
Mon Oct 27 15:50:48 CDT 2008

On 27 Oct 2008, at 17:05, Matt Warden wrote:

>> Before the CRA, it was legal for banks to not consider issuing  
>> loans to
>> people who lived in certain geographic areas. Banks would have maps
>> (literally) with "no loans here" areas marked off on them. If  
>> someone same
>> in asking for a loan with a "wrong" address, tough luck.
>> The CRA stopped this practice of arbitrary discrimination.
> Ok, we're getting somewhere. Why did the banks have these maps? Do you
> disagree that it's related to risk?

I think it's a fundamentally lazy approach to risk, shot through with  
degrees of prejudice, that meant that people in those areas were much  
less likely to get loans from reputable lenders (as opposed to sharks)  
than their individual status would otherwise suggest.

Now the free marketeer will argue that that leaves money on the table,  
so would never happen. But neither you, nor Adam Smith, are allowing  
for the irrationality involved in prejudice.


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