Scott Adams, author of the Dilbert
cartoons, blogs about lending:
In one of my earlier career incarnations I was a banker. My job for a few years included reviewing and approving commercial loans for doctors and dentists. One day I declined a loan application for a dentist who, according to his recent tax returns, didn`t have enough cash flow to repay the loan. My boss at the time reviewed my work and turned the decline into an approval without even looking at the financials. When I asked why, he explained that the borrower had a Chinese name. I questioned the wisdom of this lending procedure and he directed me to the files of delinquent borrowers, challenging me to find any Chinese names in there. There weren`t any. I`m not judging, just telling you what happened.Scott Adams Blog: Predatory Lenders 10/03/2008
Technically, this is as illegal as refusing to lend to someone because you don`t like their race—all the members of groups with many delinquent borrowers in the files could sue. And the manager may have considered that the dentist may have had more ability to pay than would show on his tax return. According to John Derbyshire "A Chinatown merchant would think himself a fool if he paid more than nominal tax on his revenues."