[mcherm]

> It's important that while we keep in mind the ethical considerations of minorities there is also an ethical consideration of marginalized users of financial capital, who are denied credit because banks are unable to afford them a lower rate due to lacking information.

That's true. If we didn't give credit to more than a few outstanding black folks, then some poor whites could get credit cards at lower rates.

The most important thing to realize here is that DISCRIMINATION CAN WORK. If everyone agrees that redheads are no good, and everyone is extra careful about lending money to redheads and extra reluctant to hire redheads and extra-strict when deciding how to prosecute and sentence redheads, then network effects will make it a self-fulfilling prophecy. A redhead will be more likely to get caught up in criminal proceedings, will be more likely to get fired (or not hired in the first place), and therefore will be more likely to default on their loans.

For the most part, society has decided that this is either a moral outrage or a case of tragedy of the commons. From the moral point of view we say it's just not ethical to discriminate against people based on race, sex, family, and such. From a purely utilitarian point of view we can say that discrimination can benefit one party at a cost born by all of society. As is usual with tragedy of the commons situations, we can repair the problem with regulation. Regardless of whether you prefer the moral approach or the utilitarian one, there is a pretty strong case to be made that it is GOOD (on a society-wide basis) to give better deals to some (those marginal whites) than others (those marginal blacks) by prohibiting the use of certain information in granting credit.