[CLOSED-SCRAPED] Fair Access to Credit Act

[Lusane]

Hi, this is a draft piece of new regulatory legislation for the WA. Notes would be appreciated.

Category: Regulation -- Consumer Protection
Strength: Mild

BELIEVING in fair access to credit products for consumers throughout member nations.

NOTICING no regulation to cause lenders and financial institutions to enact policy to circumvent outside bias preventing consumers of certain sects, groups, or backgrounds from obtaining credit products.

SEEKING to protect consumers based on race, color, religion, national origin, sex (gender), marital status, age, or sexual orientation from discriminatory practices leading the denial of access to a credit product(s).

The World Assembly therefore;

DEFINES credit products as a loan or extension of funds to a consumer, including but not limited to installment loans, payday loans, mortgages, revolving credit lines, equity lines of credit, automobile loans, collateralized loans, credit cards, etc.

DEFINES consumers as actual citizens, sole proprietorships, or businesses; rather they be registered or unregistered. (depending on regulation in their member nation)

DEFINES lenders as private and/or public institutions designed to offer access to credit products, rather licensed or unlicensed. (depending on regulation in their member nation)

DEFINES financial institutions as private and/or public, brick-and-mortar or electronically controlled corporations or government departments in which their main purpose is to:

(a) hold deposit for consumers;
(b) hold deposit for government institutions;

and to;

(1) provide credit to a consumer as aforementioned and defined;

DEFINES discriminatory practices as erroneous decisions made by lenders or financial institutions; including employees thereof; based on race, color, religion, national origin, sex (gender), marital status, age, or sexual orientation; that led to a negative outcome and/or denial on an application or request for a credit product.

PROHIBITS the use of discriminatory practices among lenders and financial institutions, public and private to deny access to credit products based on race, color, religion, national origin, sex (gender), marital status, age, or sexual orientation.

ENCOURAGES member nations to eliminate discriminatory practices with lenders and financial institutions throughout their nations.

CLARIFYING that this act does not prohibit lenders from using means of inability to reasonably meet income requirements, credit scoring requirements, or information derived from a consumer reporting agency as a means to deny credit to a consumer.

STRONGLY RECOMMENDS that World Assembly member nations provide consumers fair access, free from discriminatory practices in regards to credit products.

[Grays Harbor]

Category? Strength/area of effect?

[Lusane]

Category? Strength/area of effect?

Category: Regulation -- Consumer Protection.
Stregnth: Mild

[Imperium Anglorum]

Non-discrimination provisions are all already created by CoCR, with exception for compelling practical purposes.

[Lusane]

Non-discrimination provisions are all already created by CoCR, with exception for compelling practical purposes.

Provisions are already in place in certain jurisdictions "not to discriminate" or to eliminate discrimination, however; it is understood in regard to finances that some consumers qualify for an extension of credit, and some consumers do not. This act establishes, in plain text; that means of discrimination cannot be used as a basis to disqualify someone from receiving credit and rather affirming practical measures; such as consumer income, credit scores, and consumer reports. With lenders and financial institutions having the ability to approve and deny consumers, clear guidelines about discrimination in their industry is vital to the financial success of the citizens of member nations.

[Imperium Anglorum]

I'm aware of non-discrimination legislation like FHA and even extensions like CRA. And the more generalised legislation present on the topic, at least in the United States.

But what you just described does nothing but establish that one cannot be discriminated against in credit approvals, except for compelling practical purposes, like the ability to repay. On a specific enforcement level, it is also difficult to determine (absent explicit documentation which only morons would create) whether an action was taken due to financial and location-based risk or due to racial animus, especially when disadvantaged groups are disadvantaged on financial and locational grounds.

Moreover, your conception of a financial institution excludes (1) shadow banking system institutions and (2) institutions which do not practice depository financial intermediation, but rather, do similar practices by borrowing for their source funds.

[THX1138]

...compelling practical purposes.

*shudders*

[Lusane]

I'm aware of non-discrimination legislation like FHA and even extensions like CRA. And the more generalised legislation present on the topic, at least in the United States.

But what you just described does nothing but establish that one cannot be discriminated against in credit approvals, except for compelling practical purposes, like the ability to repay. On a specific enforcement level, it is also difficult to determine (absent explicit documentation which only morons would create) whether an action was taken due to financial and location-based risk or due to racial animus, especially when disadvantaged groups are disadvantaged on financial and locational grounds.

Moreover, your conception of a financial institution excludes (1) shadow banking system institutions and (2) institutions which do not practice depository financial intermediation, but rather, do similar practices by borrowing for their source funds.

I can understand where you're coming from. I guess I could overhaul the legislation to put in place specific guidelines in regards to consumer reporting? Thoughts?

[Araraukar]

IC: "This is not an international issue," Johan said, knowing how oft-used that phrase was. "If your nation wants to make your citizens able to buy "on credit" - which is more or less just a kind of debt owed to whatever institution forks over the payment on the spot - then make national laws that enable that. There is no need to push for a WA-wide legislation on the matter."

OOC: I'm not entirely sure whether you can make this (once you shift focus away from the antidiscriminatory stuff) one internationally relevant, since WA nations don't have unified bank systems or any kind of directly connected systems, unlike RL nations. Also remember that there's a reason we talk about "NationStates multiverse"; WA nations only pretty much have access to the WAHQ in common.

[Imperium Anglorum]

A debt and a credit are the same thing from two different angles. This idea that certain nations don't have such thing as borrowing denies the realities of social behaviour and interaction. See generally Graeber, Debt the first 5000 years.

[Tinfect]

A debt and a credit are the same thing from two different angles. This idea that certain nations don't have such thing as borrowing denies the realities of social behaviour and interaction. See generally Graeber, Debt the first 5000 years.

OOC:
Other forms of social and economic organization don't exist! Other forms of social and economic organization don't exist! Other forms of social and economic organization don't exist!

If I say it enough, it becomes real! Please oh please make the mean socialists go away! Please oh please!

[Araraukar]

A debt and a credit are the same thing from two different angles. This idea that certain nations don't have such thing as borrowing denies the realities of social behaviour and interaction. See generally Graeber, Debt the first 5000 years.

OOC: The alternative Earth Araraukar is on hasn't followed the RL script for the last 70 million years, so you really don't get to tell me what is or isn't realistic there.

EDIT: And before you quote me the history of money and credit, I know both well enough to know the points where things could have gone differently and, on my Alt-Earth, partially did.