Bias Costs!

This week before Christmas, Bank of America has agreed to pay US$335 millions to settle allegations against its subsidiary, Countrywide Financial Corp.for discriminatory mortgage lending towards blacks and Hispanics charged higher fees and rates when their creditworthiness did not warrant the additional costs. Four other major banks are negotiating with federal and state officials on alleged foreclosure abuses.

There are a couple key lessons here for all financial institutions if not all companies. Policies and practices have to be reviewed and policed continuously for any bias against any segment of the population-minorities or otherwise. In the USA the government officials are like eagles swooping down on complacent directives and actions. The second lesson is the heightened public awareness to bias or any discrimination by financial institutions which the press and supervisory officials in any country will be investigating more rigorously.

The unfortunate social and economic costs perpetrated on consumers has created life scars and ruined financial and physical healths. Where is the corrective formula for these unsuspecting people? In Countrywide's case it is estimated that 200,000 customers were impacted. The criteria that allowed this to happen must be removed swiftly from any institution to protect consumers and corporate reputations. Assess your principles and policies followed by affinity training for all staff and hiring practices that recognize the benefits of having appropriate representation of all population groups in your staff base. We are one people!

Pat Palmer | Friday, December 23, 2011 | Comments (0) | Trackbacks (0) | Permalink