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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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A Nation in Freefall While the Powerful Feast: Trump Calls Affordability a ‘Con Job’

BLACKPRESSUSA NEWSWIRE — There are seasons in this country when the struggle of ordinary Americans is not merely a condition but a kind of weather that settles over everything.

Published

4 weeks ago

December 3, 2025

Stacy M. Brown

By Stacy M. Brown
Black Press USA Senior National Correspondent

There are seasons in this country when the struggle of ordinary Americans is not merely a condition but a kind of weather that settles over everything. It enters the grocery aisle, the overdue bill, the rent notice, and the long nights spent calculating how to get through the next week. The latest numbers show that this season has not passed. It has deepened.

Private employers cut 32,000 jobs in November, according to ADP. Because the nation has been hemorrhaging jobs since President Trump took office, the administration has halted publishing the traditional monthly report. The ADP report revealed that small businesses suffered the heaviest losses. Establishments with fewer than 50 workers shed 120,000 positions, including 74,000 from companies with 20 to 49 workers. Larger firms added 90,000 jobs, widening the split between those rising and those falling.

Meanwhile, wealth continues to climb for the few who already possess most of it. Federal Reserve data shows the top 1 percent now holds $52 trillion. The top 10 percent added $5 trillion in the second quarter alone. The bottom half gained only 6 percent over the past year, a number so small it fades beside the towering fortunes above it.

“Less educated and poorer people tend to make worse mistakes,” John Campbell said to CBS News, while noting that the complexity of the system leaves many families lost before they even begin. Campbell, a Harvard University economist and coauthor of a book examining the country’s broken personal finance structure, pointed to a system built to confuse and punish those who lack time, training, or access.

“Creditors are just breathing down their necks,” Carol Fox told Bloomberg News, while noting that rising borrowing costs, shrinking consumer spending, and trade battles under the current administration have left owners desperate. Fox serves as a court-appointed Subchapter V trustee in Southern Florida and has watched the crisis unfold case by case.

During a cabinet meeting on Tuesday, Trump told those present that affordability “doesn’t mean anything to anybody.” He added that Democrats created a “con job” to mislead the public.

However, more than $30 million in taxpayer funds reportedly have supported his golf travel. Reports show Kristi Noem and FBI Director Kash Patel have also made extensive use of private jets through government and political networks. The administration approved a $40 billion bailout of Argentina. The president’s wealthy donors recently gathered for a dinner celebrating his planned $300 million White House ballroom.

During an appearance on CNBC, Mark Zandi, an economist, warned that the country could face serious economic threats. “We have learned that people make many mistakes,” Campbell added. “And particularly, sadly, less educated and poorer people tend to make worse mistakes.”

Stacy M. Brown

Posts by Stacy M. Brown

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The Numbers Behind the Myth of the Hundred Million Dollar Contract

BLACKPRESSUSA NEWSWIRE — Odell Beckham Jr. did not spark controversy on purpose. He sat on The Pivot Podcast and tried to explain the math behind a deal that looks limitless from the outside but shrinks fast once the system takes its cut.

Published

4 weeks ago

December 3, 2025

Stacy M. Brown

By Stacy M. Brown
Black Press USA Senior National Correspondent

Odell Beckham Jr. did not spark controversy on purpose. He sat on The Pivot Podcast and tried to explain the math behind a deal that looks limitless from the outside but shrinks fast once the system takes its cut. He looked into the camera and tried to offer a truth most fans never hear. “You give somebody a five-year $100 million contract, right? What is it really? It is five years for sixty. You are getting taxed. Do the math. That is twelve million a year that you have to spend, use, save, invest, flaunt,” said Beckham. He added that buying a car, buying his mother a house, and covering the costs of life all chip away at what people assume lasts forever.

The reaction was instant. Many heard entitlement. Many heard a millionaire complaining. What they missed was a glimpse into a professional world built on big numbers up front and a quiet erasing of those numbers behind the scenes.

The tax data in Beckham’s world is not speculation. SmartAsset’s research shows that top NFL players often lose close to half their income to federal taxes, state taxes, and local taxes. The analysis explains that athletes in California face a state rate of 13.3 percent and that players are also taxed in every state where they play road games, a structure widely known as the jock tax. For many players, that means filing up to ten separate returns and facing a combined tax burden that reaches or exceeds 50 percent.

A look across the league paints the same picture. The research lists star players in New York, Philadelphia, Chicago, Detroit, and Cleveland, all giving up between 43 and 47 percent of their football income before they ever touch a dollar. Star quarterback Phillip Rivers, at one point, was projected to lose half of his playing income to taxes alone.

A second financial breakdown from MGO CPA shows that the problem does not only affect the highest earners. A $1 million salary falls to about $529,000 after federal taxes, state and city taxes, an agent fee, and a contract deduction. According to that analysis, professional athletes typically take home around half of their contract value, and that is before rent, meals, training, travel, and support obligations are counted.

The structure of professional sports contracts adds another layer. A study of major deals across MLB, the NBA, and the NFL notes that long-term agreements lose value over time because the dollar today has more power than the dollar paid in the future. Even the largest deals shrink once adjusted for time. The study explains that contract size alone does not guarantee financial success and that structure and timing play a crucial role in a player’s long-term outcomes.

Beckham has also faced headlines claiming he is “on the brink of bankruptcy despite earning over one hundred million” in his career. Those reports repeated his statement that “after taxes, it is only sixty million” and captured the disbelief from fans who could not understand how money at that level could ever tighten.

Other reactions lacked nuance. One article wrote that no one could relate to any struggle on eight million dollars a year. Another described his approach as “the definition of a new-money move” and argued that it signaled poor financial choices and inflated spending.

But the underlying truth reaches far beyond Beckham. Professional athletes enter sudden wealth without preparation. They carry the weight of family support. They navigate teams, agents, advisors, and expectations from every direction. Their earning window is brief. Their career can end in a moment. Their income is fragmented, taxed, and carved up before the public ever sees the real number.

The math is unflinching. Twenty million dollars becomes something closer to $8 million after federal taxes, state taxes, jock taxes, agent fees, training costs, and family responsibilities. Over five years, that is about $40 million of real, spendable income. It is transformative money, but not infinite. Not guaranteed. Not protected.

Beckham offered a question at the heart of this entire debate. “Can you make that last forever?”

Stacy M. Brown

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FBI Report Warns of Fear, Paralysis, And Political Turmoil Under Director Kash Patel

BLACKPRESSUSA NEWSWIRE — Six months into Kash Patel’s tenure as Director of the Federal Bureau of Investigation, a newly compiled internal report from a national alliance of retired and active-duty FBI agents and analysts delivers a stark warning about what the Bureau has become under his leadership.

Published

1 month ago

December 2, 2025

Stacy M. Brown

By Stacy M. Brown

Black Press USA Senior National Correspondent

Six months into Kash Patel’s tenure as Director of the Federal Bureau of Investigation, a newly compiled internal report from a national alliance of retired and active-duty FBI agents and analysts delivers a stark warning about what the Bureau has become under his leadership. The 115-page document, submitted to Congress this month, is built entirely on verified reporting from inside field offices across the country and paints a picture of an agency gripped by fear, divided by ideology, and drifting without direction.

The report’s authors write that they launched their inquiry after receiving troubling accounts from inside the Bureau only four months into Patel’s tenure. They describe their goal as a pulse check on whether the ninth FBI director was reforming the Bureau or destabilizing it. Their conclusion: the preliminary findings were discouraging.

Reports Describe Widespread Internal Distrust and Open Hostility Toward President Trump

Sources across the country told investigators that a large number of FBI employees openly express hostility toward President Donald Trump. One source reported seeing an “increasing number of FBI Special Agents who dislike the President,” adding that these employees were exhibiting what they called “TDS” and had lost “their ability to think critically about an issue and distinguish fact from fiction.” Another source described employees making off-color comments about the administration during office conversations.

The sentiment reportedly extends beyond domestic lines. Law enforcement and intelligence partners in allied countries have privately expressed fear that the Trump administration could damage long-term international cooperation according to a sub-source who reported those concerns directly to investigators.

Pardon Backlash and Fear of Retaliation

The President’s January 20 pardons of individuals convicted for their roles in the January 6 attack ignited what the report calls demoralization inside the Bureau. One FBI employee said they were “demoralized” that individuals “rightfully convicted” were pardoned and feared that some of those individuals or their supporters might target them or their family for carrying out their duties. Another source described widespread anger that lists of personnel who worked on January 6 investigations had been provided to the Justice Department for review, noting that agents “were just following orders” and now worry those lists could leak publicly.

Morale In Decline

Morale among FBI employees appears to be sinking fast. There were a few scattered positive notes, but the weight of the reporting describes morale as low, bad, or terrible. Agents with more than a decade of service told investigators they feel marginalized or ignored. Some are counting the days until they can retire. One even uses a countdown app on their phone.

Culture Of Fear

Layered over that unhappiness is something far more corrosive. A culture of fear. Sources say Patel, though personable, created mistrust from the start because of harsh remarks he made about the FBI before taking office. Agents took those comments personally. They now work in an atmosphere where employees keep their heads down and speak carefully. Managers wait for directions because they are afraid a wrong move could cost them their jobs. One source said agents dread coming to work because nobody knows who will be reassigned or fired next.

Leadership Concerns

The report also paints a picture of leaders unprepared for the jobs they hold. Multiple sources said Patel is in over his head and lacks the breadth of experience required to understand the Bureau’s complex programs. Some said Deputy Director Dan Bongino should never have been appointed because the role requires deep institutional knowledge of FBI operations. A sub-source recounted Bongino telling employees during a field office visit that “the truth is for chumps.” Employees who heard it were stunned and offended.

Social Media and Communication Breakdowns

Communication inside the Bureau has become another source of frustration. Sources said Patel and Bongino spend too much time posting on social media and not enough time communicating with employees in clear and official ways. Several told investigators they learn more about FBI operations from tweets than from internal channels.

ICE Assignments Raise Alarm

Nothing has sparked more frustration inside the FBI than the orders requiring agents to assist Immigration and Customs Enforcement. The reporting shows widespread resentment and fear over these assignments. Agents say they have little training in immigration law and were ordered into operations without proper planning. Some said they were put in tactically unsafe positions. They also warned that being pulled away from counterterrorism and counterintelligence investigations threatens national security. One sub-source asked, “If we’re not working CT and CI, then who is?”

DEI Program Removal

Even the future of diversity programs became a point of division. Some agents praised Patel’s removal of DEI initiatives. Others said the old system left them afraid to speak honestly because they worried about being labeled racist. The reporting shows a deep and unresolved conflict over whether DEI strengthened the organization or weakened it.

Notable Incidents

The document also details several incidents that have become part of FBI lore. Patel ordered all employees to remove pronouns and personal messages from their email signatures yet used the number nine in his own. Agents laughed at what they saw as hypocrisy. In another episode, FBI employees who discussed Patel’s request for an FBI-issued firearm were ordered to take polygraph examinations, which one respected source described as punitive. And in Utah, Patel refused to exit a plane without a medium-sized FBI raid jacket. A team scrambled to find one and finally secured a female agent’s jacket. Patel still refused to step out until patches were added. SWAT members removed patches from their own uniforms to satisfy the demand.

A Bureau at a Crossroad

The Alliance warns that the Bureau stands at a difficult crossroads. They write that the FBI faces some of the most daunting challenges in its history. But even in despair, a few voices say something different. One veteran source said “It is early, but most can see the mission is now the priority. Case work and threats are the focus again. Reform is headed in the right direction.”