U.S. Rep. Mike Turner (R-OH) has thrown his support behind legislation that addresses allegations that some financial service firms may be placing higher borrowing costs on students who attend historically black colleges and universities (HBCUs) and community colleges.
“Under no circumstances should someone’s borrowing rate be higher because they attend a school that primarily serves minorities,” Rep. Turner said.
A February report from the Student Borrower Protection Center on “educational redlining” found some financial service firms may be using data from an applicant’s educational background to assess creditworthiness for private student loans, according to information provided by the congressman’s office. The report raised concerns that some borrowers may unfairly face higher costs of lending because they attend or graduated from HBCUs, Hispanic-serving institutions, and community colleges.
Rep. Turner became the first Republican to support the Examining Educational Redlining in Lending Act, H.R. 8039, introduced by U.S. Rep. Marcia Fudge (D-OH) on Aug. 14. The legislation, which Rep. Turner cosponsored on Aug. 21, would require the Bureau of Consumer Financial Protection (CFPB) to conduct an assessment of the use of certain educational data in determining the creditworthiness of an applicant.
“It is critical that the CFPB investigates the allegations of educational redlining,” Rep. Turner said. “I will continue to support our HBCU and community college students by challenging discriminations such as this.”
H.R. 8039 aims to investigate educational redlining by asking the CFPB to assess the use of educational data by consumer lenders in their businesses, requiring the CFPB to create a public report on its findings, and submitting that report to Congress, according to a summary of the bill.
Rep. Fudge stated she was concerned that lenders may factor in where borrowers attend college or their fields of study when making credit determinations. “I thank Congressman Turner for supporting the Examining Educational Redlining in Lending Act, which represents an important first step towards examining discriminatory lending practices, protecting borrowers and ensuring higher education remains a driver of opportunity and not a barrier to financial services.”
Dr. Steve Johnson, president and CEO of Sinclair Community College in Rep. Turner’s district, said, “Any penalty or premium charged to any student by any loan provider on the basis of attending a community college is just plain wrong. We appreciate Congressman Turner’s bipartisan support for this legislation and for other common-sense policies that will help Sinclair Community College’s students and families to invest in themselves and their future.”