GAO reported on racial and income disparities in access to financial services and financial security in retirement.
Based on information gathered over a decade, GAO asserted that:
- racial and income disparities exist in access to financial services and the availability of credit, particularly for (i) women and minority farmers seeking credit, compared to other agricultural enterprises and ( (ii) small minority-owned businesses seeking credit;
- existing racial and income disparities in access to financial services correlate with increased retirement financial security challenges for minority and low-income households;
- data limitations create challenges in the fair monitoring and enforcement of loans, especially in non-mortgage credit markets where lenders are prohibited from collecting data regarding personal characteristics, such as race and nationality;
- regulations, including those relating to anti-money laundering, can increase burdens on financial institutions, which can have a negative impact on consumers’ access to financial services; and
- FinTechs can provide solutions to support expanded access to credit, although the risks of lending discrimination in FinTechs are not yet fully understood.