> banks ... including the racial markup of their customers in decisions would be expected to perform worse than others, wouldn't they?
if a bank is including a racial markup, it may be because they believe there's more risk with that loan (which must be made up via said mark up).
If it's actually true that such a loan is riskier, then the bank acted correctly.
if it was actually wrong - that a racial mark up was unjustified financially - then a competitor bank that correctly makes this conclusion would offer the lower, correct rate, thus capturing said racial group as customer away from the more discriminating bank!
if a bank is including a racial markup, it may be because they believe there's more risk with that loan (which must be made up via said mark up).
If it's actually true that such a loan is riskier, then the bank acted correctly.
if it was actually wrong - that a racial mark up was unjustified financially - then a competitor bank that correctly makes this conclusion would offer the lower, correct rate, thus capturing said racial group as customer away from the more discriminating bank!