Evidence of Racism or Propaganda

Racism or Propaganda

Let’s be clear: racism is a despicable ideology that has no place in a civilized society.  Disgruntled New condemns it in all its forms and will not tolerate it. Is this racism or propaganda? Let’s have a look.

This infographic appears to show racist lending practices:

News story: where this chart comes from

If I were to run a story asserting the racist lending practices of any financial institution based solely on this infographic alone, it would fail the smell test. While CNN did include a link to raw data, it was not a direct link, and there was no link to their analysis data. By analysis data, I mean specifically the manipulation of the raw data for their analysis.

But if we are only going to look at racial demographics, let’s look at the actual numbers with a chart, shall we?

Denials

In the chart above, whites are denied far more than blacks or other racial demographics.

Approvals

This chart shows that approvals for other non-white borrowers exceed those for blacks and whites combined.

Reasons for Denials

If your going to make a case for racism, you need to present the whole picture, not just the part you want everyone else to see, and then only mention the other stuff in passing. To be fair, the CNN journalist did not outright make a claim of racism, but it was highly suggested.  That is certainly the conclusion another X user, formerly Twitter, came to:

Holy Crap, this is sad. How is this not racism on full display? Am I missing something?

According to data from the Consumer Financial Protection Bureau, the LARGEST credit union in the US, Navy Federal, approved a higher percentage of applications from white borrowers making… pic.twitter.com/wUyGpph71L

— Brian Krassenstein (@krassenstein) December 14, 2023

For this reason alone, it is important to include all the pertinent information and let the reader decide without hinting at a desired conclusion. So here is some more pertinent information:

The number one reason for a loan denial is the debt-to-income ratio across all demographics, followed by poor credit history. Whites were in nearly all reasons for loan denial compared to blacks or other non-whites. While it is true that whites get more loan approvals than blacks, is it truly racism? Or is it propaganda?

Sources

The raw data

The code sheet to understand the raw data

For a more human-readable format with out all the extraneous information

Analysis data

Methodology

I used a much smaller dataset specific to the Navy Federal Credit Union since the originating story mentions them directly. The dataset CNN used can be found here. I must warn you that the file is nearly a gigabyte in size, and you will need special software to even read the data. There are 1.6 million records alone for the Navy Federal Credit Union for the year 2022.

For the dataset I used, see the sources above. It was not human-readable and contained other fields that were just not necessary for this article, so I trimmed it down while still keeping the relevant data intact. I separated the data into three demographics: white, black, and other non-white. Then I looked at the number of records for the denials and approvals, as well as the reasons for denial across the demographics, using the same criteria as CNN.

My Conclusions

1. You are more likely to be denied if you are white
2. You are less likely to be denied if you are not white or black
3. Too much debt-to-income is the number one reason for denial
4. Poor credit history is number two reason for denial
5. Other is the number three reason for denial but it is unclear what other means in this context
6. Blacks are marginally less likely than whites to have a poor work history

Is it racism or propaganda? Honestly, I don’t know. The data presented here is inconclusive at best. I suppose if you lump the other non-whites in with blacks, then maybe a case for racism can be made. The only troubling denial reason I can see is “other.” I’m not sure what that is—maybe a credit score. But is it racist to deny a loan application for too much debt or a poor credit history if the applicant is not white? Blacks and other non-whites were consistently lower in all nine reasons listed for loan denial than whites.

No disrespect to Brian (see embedded X post/formerly Twitter), but I don’t see how he can come to the conclusion based on that infographic from CNN alone. There simply isn’t enough information to draw that conclusion. So I am leaning towards propaganda.