The Responsible Will be Punished

ByBrian Phillips

One’s credit score determines one’s ability to obtain loans at favorable rates. Those with a higher credit score are deemed to pose fewer risks. Over time, they have demonstrated the ability to borrow judiciously and pay back their loans. Those with less stellar credit scores haven’t. But now, the Biden administration wants to punish those who have exercised financial constraint and responsibility. As is the case when altruism is in play, the responsible will be punished.

A new rule from the Federal Housing Finance Agency will require individuals with higher credit scores to pay additional fees to subsidize those with lower scores. Experts estimate that those with a score above 680 (which is considered a fair score) will pay an additional $40 per month on a $400,000 mortgage.

This is simply a new twist to a policy that has been tried before. In the early 2000s, the federal government began subsidizing high-risk loans in an effort to increase home ownership among low-income families and minorities. One doesn’t need an MBA to know that those taking out high-risk loans stand a good chance of defaulting, and that is precisely what happened in the late 2000s. The financial crisis of 2007-8 was the result.

Advocates of these types of policies like to claim that lenders discriminate against minorities. They claim that skin color, not poor credit scores, is why minorities have difficulty obtaining a mortgage. They argue that lenders must correct their policy of making mortgage decisions based on skin color by making mortgage decisions based on skin color. This policy, like those that preceded it, is doomed for failure.

Punishing those who have higher credit scores is a gross injustice. They will be punished, not for their transgressions, but because they have acted responsibly over a period of time. The responsible will be punished to provide subsidies to the irresponsible.

Anyone who objects to this hideous regulation must reject the moral code that gives rise to it—altruism. Altruism holds that we have a moral duty to self-sacrificially serve others. Biden wants to make sure that we do so.

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