Finance companies overcharge African-American automobile loan borrowers
Hot Research Friday!
Charles, Hurst, and Stephens (2008) article, "Rates for Vechicle Loans: Race and Loan Source" (AER, 2008 98:2,315-320), finds that finance companies, such as GMAC, charge African-American more than similarly situated White borrowers at finance companies. Some of their statistical models point to differences as large as 120 basis points (1.2%) higher rates for African-American borrowers.
The authors do not find a similar differential for African-American borrowers at banks. They also find that most of the difference in rates is between similarly situated African-American high interest rate borrowers and White hihg interest rate borrowers.
Charles, Hurst, and Stephens (2008) article, "Rates for Vechicle Loans: Race and Loan Source" (AER, 2008 98:2,315-320), finds that finance companies, such as GMAC, charge African-American more than similarly situated White borrowers at finance companies. Some of their statistical models point to differences as large as 120 basis points (1.2%) higher rates for African-American borrowers.
The authors do not find a similar differential for African-American borrowers at banks. They also find that most of the difference in rates is between similarly situated African-American high interest rate borrowers and White hihg interest rate borrowers.
Labels: discrimination, hot research, lending discrimination
posted by The Experts @ 3:14 PM
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