If you like the DMV and TSA, you’ll love giving government sole control of credit reporting. Editor’s note: This article is available for members only.
05/04/2022 10:30 A.M.
15 minute read
Key Takeaways:
- Closing the racial wealth gap by enabling more minority families to access high‐quality financial services is a moral and economic imperative.
- The emergence of comprehensive credit reporting democratized financial access.
- Closing the gap in credit scores among different subgroups in American society requires well‐conceived policies to build individual capability (such as better‐designed financial literacy programs) and wealth, not counterproductive fixes such as political manipulation of credit reporting.
By Todd Zywicki
The country is engaged in an ongoing reckoning about its history of racial inequality. One way in which this sad legacy continues to manifest itself is in consumer finances. Decades after the enactment of the Equal Credit Opportunity Act (ECOA) and a battery of federal programs aimed at improving the well‐being of the least well off, black families on average continue to have—relative to white families—lower credit scores, less wealth, less financial stability, and less access to mainstream credit products such as
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