You have a good job, no big debts, a good financial record, but still can't get a loan. You could be a victim of credit discrimination and that's illegal. But right now, there's encouraging news, two major forces teaming up to make sure lenders do business "by the numbers".
It's a collaboration that means good news for consumers. The U.S. Justice Department and the Consumer Financial Protection Bureau have joined forces to fight credit discrimination. Terrence Banks, with Clear Point Credit Counseling Solutions says, the joint effort better protects consumers from illegal lending practices. "They are working in unison and before it was separate agencies, and by them doing that, it just streamlines and strengthen the enforcement part, which is a great thing for the consumer." Banks explains.
Some warning signs you may be a victim include: You are treated differently in person than on the phone, the lender makes negative comments about race, gender or national origin or you are refused credit event though you qualify.
Bruce Whitehurst, with Virginia Bankers Association, says lenders have to tell you why you are denied credit. "That notice gives borrowers more information on who to call, if you want more information, here is the contact information, here is what to do as a next step," He says.
If you feel you're a victim, first, contact the lender and see if the problem can be resolved. If that doesn't work, report the violation to agencies like the CFPB. Under the new merger, the two groups will share information and conduct joint investigations. "If they've been denied credit and it is not a victim of discrimination, they should contact a nonprofit organization to help strengthen their finances and get them on the right track financially," Brown explains.
Consumer advocates say now is a great time to borrow and banks want to lend you money but keep in mind, discrimination may not be the reason you're denied. "It's probably related specifically, to whether or not you can demonstrate the ability to repay the loan," Whitehurst tells us. Another piece of advice, if you're applying for credit, do your research and shop around.
Here are some helpful links:
635 W. 7th Street