The "Chase" and the "5/24" rule: An open discussion of credit discrimination

[gdale6]

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@NRB525 wrote:

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@gdale6 wrote:

Interesting to see most of you saying it isnt a form of discrimination as I posted in another thread a day or so ago that I do believe that it is. Good info being presented here and this is why we have attorneys around to argue cases before the courts.

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On what legal basis is it discriminatory?

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I believe its an arbitrary number that would prevent people who are otherwise qualified for credit from obtaining it. Reference info here  http://www.consumerfinance.gov/fair-lending/

[Anonymous]

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@Darinox wrote:

Credit discrimination is illegal. Under the Equal Credit Opportunity Act, a creditor can't discriminate in any credit transaction, including mortgages, against any applicant because of these factors:

• Race
• Color
• Religion
• National origin
• Sex (gender)
• Marital status
• Age, unless the applicant is not legally able to enter into a contract
• Receipt of income from any public assistance program
• Exercising in good faith a right under the Consumer Credit Protection Act (such as disputing information in your credit report)

This means that a creditor may not use any of the above grounds as a reason to:

• Refuse you credit if you qualify for it
• Discourage you from applying for credit
• Provide you credit on terms that are different from the terms given to someone else who is similarly situated to you, such as having similar creditworthiness
• Close your existing account

Source: http://www.consumerfinance.gov/askcfpb/1255/my-application-loan-was-denied-because-my-credit-report-...

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They're saying you don't qualify if you have 5 accounts in 24 months. They set the qualification rules. 

[Anonymous]

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@gdale6 wrote:

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@NRB525 wrote:

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@gdale6 wrote:

Interesting to see most of you saying it isnt a form of discrimination as I posted in another thread a day or so ago that I do believe that it is. Good info being presented here and this is why we have attorneys around to argue cases before the courts.

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On what legal basis is it discriminatory?

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I believe its an arbitrary number that would prevent people who are otherwise qualified for credit from obtaining it. Reference info here  http://www.consumerfinance.gov/fair-lending/

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On that logic wouldn't it be arbitrary to also set a % of DTI or CL to Income or...any other numerical qualification that can kick you out whereas you'd otherwise qualify?

[Anonymous]

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@Darinox wrote:

Please do reference something when you make statements:

What is credit discrimination?

ON THE BASIS OF:

• Exercising in good faith your rights under the Consumer Credit Protection Act. http://www.consumerfinance.gov/fair-lending/

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I don't think this rule Chase has is discriminatory at all.  The action/decision Chase has made thus, the 5/24 is a corollary of changing times, abuse of cards by certain individuals, technology etc.

The notion that a company exercising in good faith its right under the CCPA is discrimination is a bit absurd.  Let me ask you a question, when a company denies an applicant a credit card because they have too many inquiries is that discrimination?

If we are going to be make this argument, lets look at it from the lenders perspective also.  Lets also review the laws that allow these banks to have the capacity to make such decisions. 

[gdale6]

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@Anonymous wrote:

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@gdale6 wrote:

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@NRB525 wrote:

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@gdale6 wrote:

Interesting to see most of you saying it isnt a form of discrimination as I posted in another thread a day or so ago that I do believe that it is. Good info being presented here and this is why we have attorneys around to argue cases before the courts.

---

On what legal basis is it discriminatory?

---

I believe its an arbitrary number that would prevent people who are otherwise qualified for credit from obtaining it. Reference info here  http://www.consumerfinance.gov/fair-lending/

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On that logic wouldn't it be arbitrary to also set a % of DTI or CL to Income or...any other numerical qualification that can kick you out whereas you'd otherwise qualify?

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Well when looking at whether a bank would be discriminating against a customer one would also need to look to the industry as a whole. It this a practice that is being done by the majority of lenders who are issuing credit cards?  DTI and CL to income are pretty much the same across the entire field though there are some that do vary. I could be completely wrong on this but its interesting to look at such angles.

[Anonymous]

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@gdale6 wrote:

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@NRB525 wrote:

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@gdale6 wrote:

Interesting to see most of you saying it isnt a form of discrimination as I posted in another thread a day or so ago that I do believe that it is. Good info being presented here and this is why we have attorneys around to argue cases before the courts.

---

On what legal basis is it discriminatory?

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I believe its an arbitrary number that would prevent people who are otherwise qualified for credit from obtaining it. Reference info here  http://www.consumerfinance.gov/fair-lending/

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The key word here is qualify [0].

So the argument goes for [0], thus the banks set the guidelines as to what those qualifications are.  If the bank sets the qualification and denies an applicant because the applicant does not meet the criteria set forth, I don't see how that will make a case for discrimination.

[Anonymous]

It would only legally be discrimination if the policy was directed at, and had an adverse impact on, a protected class. Aggressive credit seekers are not a protected class by any stretch of the imagination. 

[Darinox]

Please do open the link and read when you are stating something. The purpose of this topic is to make a rational debate not argue with blanket statements:

How can I protect myself from credit discrimination?

WATCH FOR WARNING SIGNS

Credit discrimination is often hidden or even unintentional, which makes it hard to spot. Look for red flags, such as:

• You are treated differently in person than on the phone.
• You are discouraged from applying for credit.
• You hear the lender make negative comments about race, national origin, sex, or other protected groups.
• You are refused credit even though you qualify for it.
• You are offered credit with a higher rate than the one you applied for, even though you qualify for the lower rate.
• You are denied credit, but not given a reason why or told how to find out why.
• Your deal sounds too good to be true.
• You feel pushed or pressured to sign "

Yes indeed - the qualifications which are discriminatory in nature because you DO QUALIFY FOR CREDIT from other financial institutions that DO NOT HAVE the 5/24 criteria which otherwise makes you different from other candidates.

[Darinox]

The law states that qualification is based on creditworthiness not on credit furnisher's eligibility. Hence, having =5 or more accounts does not demonstrate that you are more risky than other individuals as per your past evidence of keeping utilization low.

[Anonymous]

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@Darinox wrote:

Please do open the link and read when you are stating something. The purpose of this topic is to make a rational debate not argue with blanket statements:

How can I protect myself from credit discrimination?

WATCH FOR WARNING SIGNS

Credit discrimination is often hidden or even unintentional, which makes it hard to spot. Look for red flags, such as:

• You are treated differently in person than on the phone.
• You are discouraged from applying for credit.
• You hear the lender make negative comments about race, national origin, sex, or other protected groups.
• You are refused credit even though you qualify for it.
• You are offered credit with a higher rate than the one you applied for, even though you qualify for the lower rate.
• You are denied credit, but not given a reason why or told how to find out why.
• Your deal sounds too good to be true.
• You feel pushed or pressured to sign "

Yes indeed - the qualifications which are discriminatory in nature because you DO QUALIFY FOR CREDIT from other financial institutions that DO NOT HAVE the 5/24 criteria which otherwise makes you different from other candidates.

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You keep quoting and such to referene your argument.. It doesn't support what you are saying and we are having a rational debate here.  You keep highlighting QUALIFY.  Who deems you qualified for credit?  Is it you or the lender?  So if the lender feels your credit profile does not meet their guidelines for a card, how is that discrimination [1]?.

I think if it were so- [1], anyone who has an 800 credit score would sue because they would feel their credit profile qualified them for whatever they were applying for when denied. It doesn't work that way.