I wonder if this correlates with credit scores? Asians have the best credit scores, followed by whites, hispanics and blacks. A friend of mine oversees a group of African-Americans and he has a hard time getting them to turn in anything on time. When I go to Persian events, I notice they’re usually late, but I don’t know if they’re like this in business. I think WASPs (White Anglo-Saxon Protestants) are the most punctual group followed by Catholics and Jews.
In a report to Congress that is certain to generate controversy, the Federal Reserve Board says that credit scores vary “substantially” among racial and ethnic groups, but have made credit more available for major consumer purchases such as buying a home.
The Fed’s study, encompassing credit bureau records and demographic data from a national statistical sample of 301,536 individuals, was mandated by Congress in 2003. Credit scores are now heavily used not only in home mortgage underwriting and pricing, but in credit cards, auto loans, employment and rental application screening, and the insurance industry.
Critics have questioned the accuracy and fairness of credit-score models, charging that in some cases they are inherently biased against minority groups such as blacks and Hispanics.
After a massive research effort over several years that focused on three different credit-scoring models — including one created by Federal Reserve staff economists — the agency concluded:
• Credit-score statistical factors and models are not biased against any particular demographic group, but are highly predictive of future payment performance.
Lower scores correlate strongly with future delinquencies; higher scores are associated with good payment performance.
• Black Americans and Hispanics, on average, “have lower credit scores than non-Hispanic whites and Asians.”
• Younger individuals of all demographic groups tend to have lower credit scores on average than older individuals, partly because credit-scoring models focus on payment histories and length of credit accounts.
