(IBD) In a just-released federal report, the administration portrays these “credit invisibles” as victims of a traditional credit-scoring system. And since most are minorities, it claims that excluding them from the financial mainstream is discriminatory.
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The Federal Consumer Financial Protection Bureau states, “Our report found that black and Hispanic consumers are more likely than white or Asian consumers to have limited credit records,” CFPB Director Richard Cordray said in a press call.
“About 15% of black and Hispanic consumers are credit invisibles compared to 9% of white consumers (and) about 13% of black consumers and 12% of Hispanic consumers are thought to be among the unscored — compared to only 7% of white consumers.”
Added Cordray, “These consumers face reduced access to credit that continues to hamper their opportunities for growth throughout their lives.”
To remedy the “credit inequality,” credit reporting agencies are being pressed to generate scores for this high-risk group based on payments of cellphone and utility bills, as well as immigrant remittances.