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

[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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The line Your are refused credit even though you qualify for it refers to an applicant from a protected class who is treated differently than an applicant who is not from a protected class. The Chase 5/24 rule treats all applicants the same regardless of whether or not they are in a protected class. There is no legal discrimination here. 

[Darinox]

Protected class? Discrimination includes a specter of other things such as 'prohibited factors' Please see below highlight:

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 (below):
• Regulation B, found at 12 CFR part 1002, implements the ECOA. Regulation B describes lending acts and practices that are specifically prohibited, permitted, or required. Official staff interpretations of the regulation are found in Supplement I to 12 CFR part 1002
• Fail to provide information or services relating to, or provide different information or services relating to, any aspect of the lending process, including credit availability, application procedures and lending standards. 
• Discourage or selectively encourage applicants with respect to inquiries about or applications for credit

• Refuse to extend credit, or use different standards in determining whether to extend credit
• Vary the terms of credit offered, including the amount, interest rate, duration, and type of loan
• Use different standards to evaluate collateral
• Treat borrowers differently when servicing loans or invoking default remedies
• Use different standards for pooling or packaging a loan in the secondary market based on a prohibited factor

[Anonymous]

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@Anonymous wrote:

---

@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.

---

The line Your are refused credit even though you qualify for it refers to an applicant from a protected class who is treated differently than an applicant who is not from a protected class. The Chase 5/24 rule treats all applicants the same regardless of whether or not they are in a protected class. There is no legal discrimination here. 

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I agree...

I think we all need to take a step back and look at that particular word [QUALIFY].  If that is what the entire argument is based on, then there is no debate here really.  The banks set the guidelines and if one does not meet it, they don't get approved.  End of.

[baller4life]

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@Anonymous wrote:

---

@Anonymous wrote:

---

@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.

---

The line Your are refused credit even though you qualify for it refers to an applicant from a protected class who is treated differently than an applicant who is not from a protected class. The Chase 5/24 rule treats all applicants the same regardless of whether or not they are in a protected class. There is no legal discrimination here. 

---

I agree...

I think we all need to take a step back and look at that particular word [QUALIFY].  If that is what the entire argument is based on, then there is no debate here really.  The banks set the guidelines and if one does not meet it, they don't get approved.  End of.

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AMEN!!! THAT is the key word! QUALIFY! Chase says you DO NOT qualify for CSP,Freedom or Slate if you have more than 5 new accounts in 24 months! Doesn't sound like rocket science to me. Pretty cut and dry!

[pipeguy]

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@CreditCuriousity wrote:

Oh this is going to be the topic of today/tonight..

Big banks can get away with murder as they have and continue to do.  Currency manipulation, robo calling and the lists continue way beyond this.. They get slapped with a fine, but they make more money then the fine and continue business as usual as nothing criminal ever comes of it being the management will never see prision time for anything they do wrong 99% of the time.  If they mess up big enough see 2008 we the tax payers will bail them out.  Great life most of them have!

I don't believe the 24x5 violates any laws, but many other things banks do indeed to violate laws as mentioned above are only a few examples.  

Looking forward to catching up on this thread later tonight.

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CC you and I usually agreed on most topics, but in this case I strongly disagree with the bolded statement - I'll be happy to discuss why with you in private, but I'm 99.9% sure I'll get mod-slapped if I discuss the facts of the 2007-09 bank meltdown, especially why (politics and political reasons get mod-slapped even if they are relevant - I have the bruses to prove that....)

And no I do not work in the banking industry.

[Anonymous]

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@Darinox wrote:

Protected class? Discrimination includes a specter of other things such as 'prohibited factors' Please see below highlight:

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 (below):
• Regulation B, found at 12 CFR part 1002, implements the ECOA. Regulation B describes lending acts and practices that are specifically prohibited, permitted, or required. Official staff interpretations of the regulation are found in Supplement I to 12 CFR part 1002
• Fail to provide information or services relating to, or provide different information or services relating to, any aspect of the lending process, including credit availability, application procedures and lending standards. 
• Discourage or selectively encourage applicants with respect to inquiries about or applications for credit

• Refuse to extend credit, or use different standards in determining whether to extend credit
• Vary the terms of credit offered, including the amount, interest rate, duration, and type of loan
• Use different standards to evaluate collateral
• Treat borrowers differently when servicing loans or invoking default remedies
• Use different standards for pooling or packaging a loan in the secondary market based on a prohibited factor

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You really don't understand the legal definition of discrimination. That's okay, most people don't. Exercising in good faith a right under the Consumer Credit Protection Act refers to filing a complaint against the credit card company under the act and then being denied credit for doing so. Refuse to extend credit, or use different standards in determining whether to extend credit refers to denying credit based solely on one of the listed protected classes. Chase is not doing that.

In order to be legally considered discrimination, the action must have a disparate impact on a specific classification of people as outlined in Federal and State law, while not having a disparate impact on classes of people not covered under those laws. If Chase applied this rule only to Blacks, that would be discrimination. If Chase applied this rule only to Jewish people, that would be discrimination. If Chase applied this rule only to people who exercised their rights under the CCPA, that would be discrimination.

Chase applies this policy unilaterally across all classes, thus it cannot be discrimination under the law.

[Anonymous]

@Darinox,

Answer me this as I am particularly curious to your thoughts.  If I have impecable credit with an 800 score and a lender denies me a credit card, should I sue for discrimination because feel I am the best canddidate for that particular card I wanted as I felt QUALIFIED?

[Darinox]

Qualify - Chase sets different practices which would otherwise make you ineligible i.e. not able to qualify.

Okay let me makes this simple:

Credit discrimination is based on a variety of factors out of protected classes:

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.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.

One of the dependent clauses of the Consumer Credit Protection Act states:

• Refuse to extend credit, or use different standards in determining whether to extend credit

=5 accounts different standard from other lenders which is based on something that is not rational. Therefore illegal => therefore considered as discriminatory practice though the lender may not have intentionally done it to discriminate but instead might have resulted later on.

[Anonymous]

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@Darinox wrote:

Qualify - Chase sets different practices which would otherwise make you ineligible i.e. not able to qualify.

Okay let me makes this simple:

Credit discrimination is based on a variety of factors out of protected classes:

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.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.

One of the dependent clauses of the Consumer Credit Protection Act states:

• Refuse to extend credit, or use different standards in determining whether to extend credit

=5 accounts different standard from other lenders which is based on something that is not rational. Therefore illegal => therefore considered as discriminatory practice though the lender may not have intentionally done it to discriminate but instead might have resulted later on.

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You keep quoting though but your arguments aren't convincing.  Who sets the guidelines as to who QUALIFIES for a card?  Is it the lender or the CCPA as you keep quoting?

Also, what are you hoping to accomplish with this thread?  To make a point that Chase is wrong?  If so, that isn't the case here.  But we are all entitled to our opinions though.

[Anonymous]

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@Darinox wrote:

Qualify - Chase sets different practices which would otherwise make you ineligible i.e. not able to qualify.

Okay let me makes this simple:

Credit discrimination is based on a variety of factors out of protected classes:

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.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.

One of the dependent clauses of the Consumer Credit Protection Act states:

• Refuse to extend credit, or use different standards in determining whether to extend credit

=5 accounts different standard from other lenders which is based on something that is not rational. Therefore illegal => therefore considered as discriminatory practice though the lender may not have intentionally done it to discriminate but instead might have resulted later on.

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All I can say is that using your definitions, every lender is discriminatory when they decline someone.  And please don't make comments like 'let me make this simple'.  That is insulting to the posters who disagree with your assessment of the situation.  We are perfectly capable of understanding your argument.  We just think you are completely wrong.