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Brown, Senate Democrats Press Upstart, Lenders for Answers Following Reports of Higher Interest Rates for Students of Minority-Serving Institutions

NNPA NEWSWIRE — The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction. Under the statute, lenders can be liable if they treat applicants differently based on a prohibited basis, such as race or national origin. In addition, lenders can also be liable if their practices have a disproportionate impact on a protected class.

Published

6 years ago

February 28, 2020

Oakland Post

U.S. Senator Sherrod Brown (D-Ohio) (Photo: Marc Nozell from Merrimack, New Hampshire, USA /Wikimedia Commons)

WASHINGTON — Senator Sherrod Brown (D-OH), Ranking Member of the Senate Committee on Banking, Housing and Urban Affairs, and Senators Elizabeth Warren (D-MA), Bob Menendez (D-NJ), Cory Booker (D-NJ) and Kamala Harris (D-CA) pressed Upstart and other lenders and service providers for answers following a report from the nonprofit Student Borrower Protection Center that lenders may be charging higher interest rates to students who graduated from Historically Black Colleges and Universities and Hispanic-Serving Institutions.

“The report found that a graduate of Howard University, an HBCU, would be charged $3,499 more over the life of five-year loan than a similarly situated graduate of New York University. Based on the racial demographics at these schools, these findings raise serious concerns that Upstart’s use of educational data may have a disparate impact on borrowers of color,” the Senators wrote.

The Senators’ letter points to past concerns from regulators about the use of educational data to make credit decisions and calls on lenders to ensure that their underwriting practices comply with fair lending laws. The Senators pressed Upstart and lenders for answers to their questions by Feb. 27.

See the full text of the letter to Upstart below and the letters to lenders HERE and service providers HERE.

Dear Mr. Girouard:

We write to express concern about a recent report that found lenders’ use of educational data to make credit determinations could have a disparate impact on borrowers of color. While we encourage lenders to innovate to improve access to credit—particularly for marginalized borrowers who have been shut out of the credit system—all lenders must ensure that their underwriting practices comply with fair lending laws.

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction.^[1] Under the statute, lenders can be liable if they treat applicants differently based on a prohibited basis, such as race or national origin.^[2] In addition, lenders can also be liable if their practices have a disproportionate impact on a protected class.^[3^]

For years, regulators have raised concerns that lenders’ use of educational data to make credit decisions could result in discrimination against minority borrowers.^[4] In 2007, then New York Attorney General Andrew Cuomo criticized private student lenders’ consideration of a student’s school in determining creditworthiness and described the practice as “educational redlining.”^[5] In a 2012 report, the Consumer Financial Protection Bureau (Bureau) investigated private student lenders’ use of a “cohort default rate” (CDR)—which measures the rate at which students at a given institution default on their student loans—when determining creditworthiness.^[6] The Bureau found that the “[u]se of CDR to determine loan eligibility, underwriting, and pricing may have a disparate impact on minority students by reducing their access to credit and requiring those minority students . . . to pay higher rates than are otherwise available to similarly creditworthy non-Hispanic White students at schools with lower CDRs.”^[7] And in 2014, the FDIC brought an enforcement action against Sallie Mae Bank and Navient Solutions Inc., which found that use of CDR in their credit-scoring model for the pricing of private student loans violated ECOA.^[8]

On February 5, 2020, the Student Borrower Protection Center issued a report finding that Upstart Network Inc.’s (Upstart) use of educational data resulted in borrowers who had graduated from Historically Black Colleges and Universities (HBCUs) and Hispanic-Serving Institutions (HSIs) paying more in interest and fees than similarly situated borrowers who graduated from non-minority serving institutions.^[9] For example, the report found that a graduate of Howard University, an HBCU, would be charged $3,499 more over the life of five-year loan than a similarly situated graduate of New York University. Based on the racial demographics at these schools,^[10] these findings raise serious concerns that Upstart’s use of educational data may have a disparate impact on borrowers of color.

Upstart has stated that it does not consider the specific school that a student attended when determining creditworthiness.^[11] But the company has acknowledged that its underwriting model considers “groups of schools that have similar economic outcomes and educational characteristics.”^[12] In other words, Upstart appears to be assessing creditworthiness based on non-individualized factors, which the CFPB, FDIC, and New York Attorney General have found raise fair lending concerns.

So that we can better understand how Upstart has used educational data to make credit determinations, as well as how your company tests for and demonstrates compliance with fair lending laws, we request that Upstart provide responses to the following questions by February 28, 2020:

Describe how Upstart tests whether its credit determinations have a disparate impact on borrowers of a protected class under ECOA, and the results of any such testing.
Provide the following information about the use of “educational characteristics” used to determine the “groups of schools”^[13]in Upstart’s model, including:
1. Each “educational characteristic[]” considered by Upstart;
2. An explanation of how Upstart selected each characteristic;
3. An explanation of how and the extent to which the educational characteristics factor into credit determinations.
Provide the following information about the use of “economic outcomes” to determine the “groups of schools” used in Upstart’s model^[14]:
1. Each “economic outcome[]” considered by Upstart;
2. An explanation of how Upstart selected each outcome;
3. An explanation of how and the extent to which they factor into credit determinations
Provide any other relevant detail regarding how these “groups of schools” were formulated, including what metrics and cutoffs are used to determine the groups.
Provide detail on the number and characteristics of the “groups” constructed for your underwriting model, including:
1. The number of groups;
2. A list of the names or identifiers used to signify each individual group;
3. The total number of schools across all groups;
4. The number of schools in each individual group;
5. The total # of MSIs, including:
  1. The number of HBCUs;
  2. The number of HSIs;

The number of AANAPISI-serving institutions;

The number of women’s colleges; and
The proportion of existing MSIs and women’s colleges in the U.S. that are in each bucket.

Provide an explanation, supported by analysis, describing how grouping impacts credit determinations, including:
1. How each “group” is tiered with regard to credit determinations; and
2. How distributions of approval rates, financing fees, and interest rates charged to borrowers differ across “groups.”
Provide an explanation, supported by analysis, describing the impact that school grouping has on credit determinations for similarly situated borrowers across demographic groups.
Identify the sources of any data concerning the relationship between educational characteristics and economic outcomes used by your model.

Thank you for your attention to this important matter. Please contact Jan Singelmann, Counsel for the Senate Committee on Banking, Housing, and Urban Affairs, at Jan_Singelmann@banking.senate.gov with any questions or concerns.

Sincerely,

^[1] See 15 U.S.C. § 1691(a)(1) (prohibiting discrimination on the basis of race, color, religion, national origin, sex or marital status, age, because all or part of an applicant’s income derives from public assistance, or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act).

^[2] 12 CFR Part 1002 Supp. I Sec. 1002.4(a)-1; 12 CFR Part 1002 Supp. I Sec. 1002.4(a)-1. “Disparate treatment” may be “overt” (when the creditor openly discriminates on a prohibited basis) or it may be found by comparing the treatment of applicants who receive different treatment for no discernable reason other than a prohibited basis. In the latter case, it is not necessary that the creditor act with any specific intent to discriminate.

^[3] See 12 C.F.R. pt. 1002, Supp. 1, § 1002.6, ¶ 6(a)-2.

^[4] In addition, according to a recent article, private student lenders that are members of the Consumer Bankers Association do not use alternative underwriting standards due to the risk of discriminating against borrowers. See https://www.marketwatch.com/story/consumer-advocates-worry-your-college-major-could-affect-your-ability-to-get-a-loan-2019-07-24.

^[5] See https://www.nytimes.com/2007/06/19/us/19loans.html?_r=1&oref=slogin. He also specifically criticized one lender that “divided colleges into groups based on how their alumni repaid federally subsidized loans . . . .” Id.

^[6] CFPB Report: Private Student Loans (Aug. 29, 2012) at 79-80, available at

https://files.consumerfinance.gov/f/201207_cfpb_Reports_Private-Student-Loans.pdf.

^[7] Id. at 80.

^[8] In re Sallie Mae Bank, Consent Order, No. FDIC-13-0366b, FDIC-13-0367k (filed May 13, 2014), available at https://www.fdic.gov/news/news/press/2014/salliemae.pdf.

^[9] https://protectborrowers.org/wp-content/uploads/2020/02/Education-Redlining-Report.pdf.

^[10] According to the Student Borrower Protection Center data from the U.S. Department of Education, 89 percent of students at Howard University are African American, while African Americans and Latinos the comprise less than 20 percent of the students at NYU. See https://protectborrowers.org/new-report-finds-educational-redlining-penalizes-borrowers-who-attended-community-colleges-and-minority-serving-institutions-perpetuates-systemic-disparities/.

^[11] See https://www.upstart.com/blog/upstarts-commitment-to-fair-lending.

^[12] Id.

^[13] See supra n. 11.

^[14] Id.

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COMMENTARY: Women of Color Shape Our Past and Future

MINNESOTA SPOKESMAN RECORDER — Every March, Women’s History Month invites us to pause and honor the women whose courage, intellect, and leadership have shaped our world. This year, that invitation feels especially urgent. We are living in a time when history is being rewritten, when DEI is being recast as a threat, and when the stories we choose to uplift matter more than ever. The stories of women of color must be centered, celebrated, and carried forward with intention.

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March 9, 2026

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Women of Color Leadership Shapes the Legacy of Women’s History Month

By Dr. Sharon M. Holder | Minnesota Spokesman Recorder

Women’s History Month offers an opportunity to recognize the enduring impact of women of color leadership across history and in the present day. From Harriet Tubman and Shirley Chisholm to today’s leaders in science, politics and culture, women of color continue to shape movements, institutions and communities through courage, collaboration and vision.

Every March, Women’s History Month invites us to pause and honor the women whose courage, intellect, and leadership have shaped our world. This year, that invitation feels especially urgent. We are living in a time when history is being rewritten, when DEI is being recast as a threat, and when the stories we choose to uplift matter more than ever. The stories of women of color must be centered, celebrated, and carried forward with intention.

For centuries, women of color have been architects of progress, even when history tried to confine them to the margins. They have led movements, built institutions, transformed culture, and expanded the boundaries of justice, leadership, and community. Their contributions are not postscripts; they are landmarks. Yet too often, their brilliance has been acknowledged only in hindsight. Women’s History Month offers a chance to correct that imbalance, not only by remembering the past, but by recognizing their leadership unfolding before us.

This legacy lives in Harriet Tubman, whose courage and strategic brilliance transformed the Underground Railroad into one of the boldest freedom operations in American history. In Barbara Jordan, whose moral clarity reshaped the nation’s understanding of justice and constitutional responsibility. In Madam C. J. Walker, expanding both the beauty industry and the economic horizons of Black women. It dances in Josephine Baker, who challenged racism and resisted fascism. In Ida B. Wells and Dolores Huerta, who wielded truth and determination in pursuit of justice. In Chien-Shiung Wu, whose experiments altered science, and Shirley Chisholm, whose political courage expanded the very definition of leadership. These women did more than break barriers; they built new worlds.

A powerful throughline in the leadership of women of color is how they lead: collaboratively, creatively, relationally, and with deep responsibility to community. Their leadership is grounded not in hierarchy but in connection, in the belief that progress is something we build together.

We see this in Kamala Harris, whose presence expands the boundaries of possibility; in Ketanji Brown Jackson; in Oprah Winfrey; and in Toni Morrison, who insisted that the interior lives of Black women are essential to the human story. It resonates in Simone Biles and Serena Williams, redefining strength through excellence and self-belief.

Today, women of color continue to drive breakthroughs in medicine, technology, the arts, politics, and environmental justice. Their leadership appears not only in boardrooms or public office, but in mentorship, advocacy, and the daily navigation of systems never designed for them. The spirit shines in Mae Jemison and Ellen Ochoa; in Michelle Obama; and in the brilliance of Katherine Johnson, Dorothy Vaughan, Mary Jackson, and Christine Darden, whose work helped launch a nation into space.

Celebration is important, but it is not enough. Honoring women of color requires intentional action rooted in equity. It means creating environments where their voices are valued, challenging the biases that shape who is recognized, and ensuring progress is shared.

As we celebrate Women’s History Month, let us honor women of color not as symbols, but as leaders whose work continues to guide us. When we uplift women of color, we honor history and shape the future.

Dr. Sharon M. Holder lives in South Carolina. She holds a PhD/MPhil in Gerontology from the Center for Research on Aging at the University of Southampton, UK; a Master of Science in Gerontology from the Institute of Gerontology at King’s College London, UK; and a Master of Social Work from the Graduate College of Social Work at the University of Houston, Texas.

Dr. Holder discovered her love of poetry at the University of Houston–Downtown, where she published in The Bayou Review and the Anthology of Poetry. Today, she writes poetry as a practice of gratitude alongside her academic research.

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Woman’s Search for Family’s Roots Leads to Ancestor John T. Ward – A Successful Entrepreneur and Conductor on the Underground Railroad

THE AFRO — For years, she wanted to know more about her ancestor John T. Ward, she said, and her curiosity eventually became an obsession, leading her to become the genealogist for her family. And so, for more than a decade, she set out to trace her family’s roots and discovered a story that would change her life and the way she viewed American history.

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3 days ago

March 9, 2026

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By D. Kevin McNeir | Special to The AFRO

Shanna Ward, the owner of a publishing company and insurance agency located in Columbus, Ohio, said the elders in her family often say she inherited her entrepreneurial spirit from one of their ancestors – a formerly enslaved child from Virginia whose freedom came through manumission in 1827.

For years, she wanted to know more about her ancestor John T. Ward, she said, and her curiosity eventually became an obsession, leading her to become the genealogist for her family. And so, for more than a decade, she set out to trace her family’s roots and discovered a story that would change her life and the way she viewed American history.

John T. Ward would help others secure their freedom and justice in his roles as a conductor on the Underground Railroad, an abolitionist, and political activist. But realizing that economic freedom was essential to his and his family’s survival, he and his son founded the Ward Transfer Line in 1881 (now E.E. Ward Moving) – one of America’s oldest Black-owned businesses. While it has transferred ownership, the business remains in operation today.

Shanna Ward recently published a book about her ancestor, “The Bequest of John T. Ward,” which she hopes can be added to other unheralded tales of Black resistance that occurred during America’s antebellum period.

“Originally, I just wanted to write a 100-page story when I first began digging and was encouraged after I found a copy of a will dated 1827 which included him and was a rare example of a mass manumission,” Shanna Ward said. “Three of the slaves, including John’s grandfather, were given about 294 acres of land in the will, but all the former slaves were supposed to remain on the plantation until their 21st birthday. Some refused to remain. That’s how our family got to Ohio.”

Ward said she learned that newly freed Blacks, including her ancestors in Ohio, had to fend for themselves and often did so with amazing results given the obstacles they faced.

“In those days there were no civil rights organizations, and in local communities, Blacks formed and supported Black-owned businesses, took their own census recordings, and became involved in local politics – all without White involvement,” she said.

BOOK COVER: The cover of the book “The Bequest of John T. Ward,” written by Shanna Ward about her ancestor who, as a child, was granted his freedom in 1827 and went on to become a successful business owner in Ohio, a political activist, and a conductor on the historic Underground Railroad.

“There is part of Ohio where, during the days of slavery, if you successfully crossed the river you were free,” she said. “That was where Black life began – across the river in freedom. When we understand ourselves as more than property and uncover tales of survival which are the foundation of our legacy, then we can better understand who we are and what our ancestors endured. We are stronger than we are often led to believe.”

Efforts among African Americans to learn their family roots have increased over the past several decades, particularly given the success of the PBS documentary, “Finding Your Roots,” hosted and narrated by Harvard University professor Dr. Henry Louis Gates Jr.

On the show’s website, Gates said he developed the show in 2012 in efforts to continue his quest to “get into the DNA of American culture.”

In each episode, celebrities view ancestral histories and share their emotional experience with viewers. Gates attributes the success of the show to a significant surge in interest among Black Americans in tracing their family roots and a desire to reconnect with ancestral history that was severed by slavery.

JOHN T. WARD: John T. Ward, the historic patriarch in a family whose roots can be traced to the days of slavery in Virginia, is the subject of a new book written by a member of his proud family, Shanna Ward, called “The Bequest of John T. Ward.”

“Advancements in DNA testing have increased accessibility of records and led to a cultural push to reclaim identity beyond the ‘brick wall’ of 1870,” said Gates who noted that the 1870 U.S. Census represents the first time former slaves were listed by name and, unfortunately, serves as the point where records of their lives often stop and cannot be traced any earlier.

In a recent paper published in the journal “American Anthropologist,” University of Illinois Urbana-Champaign anthropology professor LaKisha David posits that by using genetic genealogy, African Americans now have the real possibility of restoring family narratives that were disrupted, severed and destroyed by institutional slavery.

“For African Americans who have grown up with a sense of ancestral loss and disconnection, this reclamation of family history is deeply humanizing and healing,” she writes. “It replaces the genealogical unknown with tangible knowledge of ancestral histories and kinship ties.

“Identifying African ancestors and living relatives is an act of restorative justice. It is ultimately about (re)claiming the humanity, dignity, and agency of enslaved Africans and their descendants, which is an essential component of repairing the harms of slavery.”

Ward said by uncovering her family’s truth, she has established a platform for education and empowerment for herself, her children, and today’s youth.

“I realized how important it is to pass down our own stories to the next generation,” Ward said. “There’s so much our children need to know about the Underground Railroad, the quilt codes created by Black women, and other examples of unrecorded heroics and bravery exhibited by Black men and women. Their collective efforts led to the end of Jim Crow laws and the securing of equal rights in the U.S. Constitution for African Americans. If you look hard enough, I believe everyone has someone like Harriet Tubman or Frederick Douglass in their family.”

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Advocates Raise Alarm Over ICE Operation, MOU and Detention Risks in Baltimore County

THE AFRO — “This is highly problematic given many of the charges that land people in county correctional facilities to begin with are for misdemeanors of which they may not even ultimately be proven guilty and convicted,” said Cathryn Ann Paul Jackson, public policy director for We Are CASA. “It results in a subversion of the local criminal justice system as a means to further racial profiling and do ICE’s dirty work.”

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3 days ago

March 9, 2026

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By Megan Sayles | AFRO Staff Writer
msayles@afro.com

As U.S. Immigration Customs and Enforcement (ICE) operations intensify nationwide, community organizations have become the eyes and ears of their neighborhoods—monitoring the agency’s presence and alerting residents to protect themselves and their neighbors.

In Baltimore County, nonprofits like We Are CASA have observed a spectrum of enforcement actions.

“We have seen a range of activity, including traffic stops and ICE showing up in neighborhoods or in seeming response to tips,” said Cathryn Ann Paul Jackson, public policy director for We Are CASA. “Beyond actual ICE activity in Baltimore County, we have seen many detentions of Baltimore County residents across the DMV, as community members tend to travel across counties and cities for work.”

We Are CASA, a national nonprofit headquartered in Maryland, is dedicated to empowering and improving the quality of life for working-class Black, Latino, Afro-descendent, Indigenous and immigrant communities. Jackson’s personal connection to this mission led her to the organization. A daughter of immigrants from Guyana and Trinidad, she said she grew up witnessing firsthand how immigration policy can define families’ safety, opportunity and sense of belonging.

She said the locations and times of ICE operations in Baltimore County have varied over time.

“We have consistently seen ICE arrest people at their check-in appointments, which were ironically created as an alternative to detention and are now being abused to trap people into custody,” said Jackson. “For a period of time, we were witnessing a significant amount of arrests along the Baltimore-Washington Parkway by U.S. Park Police, who were using a previously rarely enforced law against driving commercial vehicles on this road as a pretext to profile immigrant drivers, detain them and hand them over to ICE.”

Last fall, Baltimore County entered into a Memorandum of Understanding (MOU) with ICE, removing the locality from the Department of Justice’s (DOJ) sanctuary jurisdictions list and formalizing a policy for notifying ICE before the release of inmates with federal immigration detainers or judge-signed warrants.

The agreement codified an existing practice within the Baltimore County Department of Corrections. The MOU is not a 287(g) agreement, which is a partnership between local law enforcement and ICE to delegate immigration enforcement authority to police officers. Those agreements were banned by the state of Maryland on Feb. 17.

However, Jackson criticized the policy memorialized in the MOU, saying that although it is carefully drafted to avoid legal violations, it effectively allows detention centers to hold people past their court-ordered release so that ICE can take them into custody.

“This is highly problematic given many of the charges that land people in county correctional facilities to begin with are for misdemeanors of which they may not even ultimately be proven guilty and convicted,” said Jackson. “It results in a subversion of the local criminal justice system as a means to further racial profiling and do ICE’s dirty work.”

Baltimore County has said it entered into the MOU in an effort to preserve its access to federal funding. The locality explained its reasoning on a FAQ page about its removal from the DOJ’s sanctuary jurisdictions list.

“Inclusion on DOJ’s list could risk significant federal funding, on which the county and constituents depend,” the entry read. “Signing the MOU ensures that the county avoids risks to federal funding that is used to provide needed services.”

Baltimore County’s removal is not unique, as neither Maryland nor any of its counties appear on the DOJ’s list. Still, community members worry that the county’s MOU with ICE could lead to wrongful detentions and the misidentification of residents.

Immigration detainers are not always confirmation of a person’s immigration status—or lack thereof. They are requests by ICE that can be issued without a judicial determination and do not, on their own, establish a person’s legal status.

“We’re very concerned about errors occurring here in the county because of the amped up nature of this mass deportation push,” said Patterson. “This is a replacement theory-driven immigration policy. That means that at the same time we are importing White South African Afrikaaners—who at one time essentially colonized South Africa and oppressed Black South Africans—we are fast deporting people of color. All of us who are the minority can be mistaken for ‘unlawful immigrants.’”

The recent escalation in Minneapolis has heightened Patterson’s concern. He said the city has effectively been made a battleground.

Patterson said the Baltimore County NAACP wants the public to recognize that ICE operates as a militarized organization, unlike local police. He urged people to consider avoiding areas where ICE is active whenever possible and to exercise caution if they encounter agents. If approached, Patterson stressed that people verify warrants are properly signed and directed at them, assert their right to remain silent and contact an attorney before answering questions or consenting to searches.

He also encouraged residents to notify the Baltimore County NAACP of any encounters with ICE.

“We don’t want to wait for Minnesota in Maryland before speaking out about this,” said Patterson. “We want to equip our people to protect themselves behaviorally, consciously and conscientiously because these things are coming to pass. The imprint is among us and we need, therefore, to be aware.”