Borrow money from banks now • EBONY
I found out why.
First of all… Happy Women’s History Month. Shout out to all the women who have overcome unthinkable obstacles to truly make this world a better place and those who shine with happiness living their best life. I was brought up mainly by women. Several of my former bosses are women. Many of my best friends are women. More than half of the people who read The Dime are women. The classmates, professors and colleagues who pushed and supported me in my law studies? Mainly women. And at the end of the day… women have inspired, directed and influenced many of my ideologies about what it means to be a man. Appreciate yourself for real. I am always grateful. And I show my gratitude by bringing us all to the money.
For this week’s edition of The Dime, I wanted to cover one of my favorite topics, loans.
Everyone and their mom have talked about the next hot stock. People even went and started playing GameStop again (what’s wrong with them?). But what has been completely missed is the fact that the credit guidelines have changed a bit this year and since small business development, concert work and side activities remain important games, I thought that you might need a breakdown on what has changed – because at some point you’re probably going to need or want to borrow money.
The Consumer Credit Protection Bureau (CFPB) is the government agency that protects people from scams (they really need to attack these people shilling “Trading course” but imma mind my business). Another thing they do is make adjustments to the laws that FICO, Experian, Transunion, banks, and other creditors follow. They just came out Equal Credit Opportunity Act (ECOA) rule B guidelines. The purpose of the ECOA is to do exactly what it says, to give people equal access to credit regardless of race, gender or creed. Regulation B is an ECOA provision that is supposed to be the enforcement mechanism (I call it the teeth) to protect people from credit discrimination.
Before we get into meat and potatoes, here are some statistics that Regulation B tries to address:
Black people tend to pay more for conventional and non-conventional loans.
About 16% of blacks are refused loans for the purchase of conventional housing. This is high compared to white house borrowers who only have a 6.1% refusal rate.
Blacks are credit denied at 44% while whites are only denied a fraction of that at the rate of 19%.
Black companies are twice as likely to be rejected for business loans.
Studies have shown that the denial of certain types of credit has created a great disparity between the wealth of blacks and whites. The typical white family has $ 188,200 in family wealth, which is 8 times more than the typical black family who has around $ 24,100 in family wealth.
Access to credit has given people better access to wealth through purchases of assets such as homes, businesses, and other things that add money to your pocket.
So now that you know what Regulation B is trying to fix, let’s see how they are trying to fix it.
A ton of banks made strategic decisions to align with the “black struggle” during the George Floyd protests in 2020. Plus, the government started releasing a bunch of “Special Purpose Credit ProgramsTo essentially find new ways to ensure that black borrowers get fewer refusals and better access to loans. To qualify for these “special purpose credit programs” you have to meet the “social need” which is actually short because you have to be part of the group that the credit program is trying to help. Unfortunately, it’s not widely publicized, so you need to be aware.
Now you are.
So the next time you go to the bank, ask them if they have any “special purpose credit programs” available and if they don’t ask more questions, like why they don’t. This can be a trick that you can use to access a loan. The problem that some have encountered with these “special purpose credit programs” is that while they are meant to help some people, others may be denied access that does not necessarily fit the “class.” or the group of people they are supposed to help. .
So the CFPB said here is what lenders should do (ie what you should look for) with regards to “special purpose credit programs”
- There must be a “written plan” and the written plan must describe the “class” of people who would be eligible.
- There should be information on (a) the duration of the program or (b) when the program will be reassessed to see if it is necessary to continue to do so.
So in reality this guideline from Regulation B tells me that if you need a loan from a bank – and black people have to hurry up and get it fast, because these joints may only stay here for a while. limit.
Another thing that I noticed with the credit guidelines on these “special purpose credit programs” is that the “class of people” really needs to focus on a group of people who in the past have had problems. problems accessing credit. So while the boards really scream BLACK PEOPLE (based on the data above), other people “might” fall into that category.
Anyway … If you are trying to access funds to grow your business, specifically ask for these special purpose credit programs. Get your loan. Start this business. Future generations will thank you for it.